Tuesday, May 4, 2010

"Round table"

Bordeaux wine distribution system can often be used as a deadly weapon by a talented and ambitious broker to gain a position of monopoly, and therefore exclude other colleagues from competing for a piece of the "pie" and the 2% commission commonly used by the profession.

Often used for wines difficult to sell and with an irregular distribution, and allows, in an easy vintage (2009), to promise regular distribution for future vintages.

On paper, it looks like a good choice and a good strategy, except that it angers anyone excluded, brokers, wholesalers and makes enemies, detractors, even evil minds, as Audiard would say... and in the end, the broker and this monopolistic game drive prices from the property down year after year: “you know, it's rough out there... competition, etc.”
I haven't seen any brands using this system increase their notoriety and prices (except when they leave this system).

This is a generalization and there must be some exceptions, some altruist owners are able to make better wines every year, even though they are guaranteed to sell, because it is often the problem with these kinds of so called ready-made deals. Why make the effort to make better, no ?... It creates more risk: in fact the property putting this system in place does it to taking any chance, which I can imagine, if the shareholders or owners agree...

Nothing to do with direct or exclusive distribution where the owner or wholesaler must do better every year and nothing to do with distribution where a group of serious and big companies exist next to a string of small companies making believe they're busy, a system that has proven over time.

Maybe I am wrong contesting this “round table”, but I think that one of the most important professional in Bordeaux agrees...

Of course, these remarks don't concern me when my company is involved in such “round table”.
For me, it's not the same?!

It's also true that I am rarely asked to participate in a “round table”. I have a problem promising to buy a wine I would not be able to sell when the first crisis comes

Again, promises only involve those who believe in them...

Later, I'll speak about territorial exclusivities.

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