Issue link: http://read.dmtmag.com/i/744999
1 4 V I N E YA R D & W I N E RY M A N A G E M E N T | N o v - D e c 2 016 w w w. v w m m e d i a . c o m hanges to allow wine sales in Colorado and Pennsylvania gro- cery stores may be the first steps in allowing supermarket wine in the rest of the country, including New York state. "That's certainly the way I see it," says Roberta Blacklund, a long- time Colorado retailer and now a wine marketing consultant. "We're going to see it happen everywhere in the next decade, if not sooner. It boils down to what the consumer wants, and the consumer wants easy access to the marketplace — and wants it now." The changes to the law in each state will let grocery stores sell wine. Before that, only one store in each chain could could sell wine in Colorado and there were no chain liquor stores, while Pennsylvania's state stores had the wine monopo- ly in the Keystone state. Both new laws weren't expected to pass after years of failure, and included compromises designed to protect the existing system. In this, they showed that there may be a way to open grocery stores to wine sales in the remaining holdouts, including the New York state mega-market and New Jersey, which limit super- market sales to one and two stores in a chain, respectively. In Colorado, the law lets grocers, Walmart and Target compete direct- ly with liquor stores and lets both supermarkets and retailers expand sales to 20 locations in phases over 20 years. It also offers protection, including regulated buyouts, for small retailers who don't want to compete in the new environment. Says Blacklund: "Is it perfect? No. But it was an amazing compromise in the final hour." In Pennsylvania, the law's pas- sage was even more unexpected than in Colorado, given its long history of bitter debate, says Dave Falchek, who writes about wine and business for The Times-Tribune newspaper in Scranton. The chang- es are also part of a wide-reaching compromise, limiting the inventory available to supermarkets and inde- pendent retailers while keeping an expanded state store system in place to compete with the chains and other retailers. "The reforms put wine in more places and should lead to greater wine sales and consumption," says Falchek, citing that many don't think the reforms went far enough. "Under the state monopoly, wine Colorado, Pennsylvania Allow Grocery Store Wine Sales has been available in just 621 state- run stores serving more than 12 million citizens, fewer outlets than Delaware or the city of Chicago. And even though the wines will be the same poor selection and higher prices available through the state stores, the fact remains that wine will be more widely available." The Pennsylvania bill also allows direct shipment, long contentious in the state. "Having a mechanism for producers to sell directly to consum- ers is positive for those wineries who see a value in shipping to Penn- sylvania residents," says Falcheck. The other good news for the wine business? Expect retailers — if they keep promises made during debate to secure passage of the new laws — to carry more wine made in each state. This should be a boost for the Colorado and Penn- sylvania wine industries, which have struggled with retailer indifference. made with Napa Valley grapes in North Carolina caught the attention of a key Napa trade group and U.S. Rep. Mike Thompson (D-St. Hele- na), Napa Valley's congressman. The new rules will limit FSO wines to using terms like red wine or white wine on the front label, in the hope that producers will use the more accurate American appel- lation so they can list the grapes and the vintage. One irony to all this? The new FSO rules may give producers incentive to label their wine Califor- nia, even if it's made in Texas or Vir- ginia. That's because they'll be able to use grape names and the vintage on wine made with 75% California fruit, something they might not want to do today in favor of FSO. Wine marketing consultant Roberta Blacklund sees the changes in wine sales laws as a reflection of consumer demand. Journalist Dave Falchek sees the new laws as a boon for wine sales.