Cheers is dedicated to delivering hospitality professionals the information, insights and data necessary to drive their beverage business by covering trends and innovations in operations, merchandising, service and training.
Issue link: https://read.dmtmag.com/i/30177
FIRST SIP ® Does the Business Benefi t from the Th ree-Tier System? an executive director of Rabobank in New York is causing quite a stir. It’s not based on a large number of participants, 46 to be exact, and it includes executives from all the tiers. While its main focus is only on the off -premise sector, much of its content is relevant to the on-premise as well. Th e survey asks if retail prices might not be A lower for the buyer—and the end consumer—if the cost of the distribution tier were taken out of the equation. It also questions if smaller producers and a greater number of imports would have more access to the market if this happened. It asked industry representatives to share if they believed that the elimination of the wholesale tier is something that could happen in the next decade. Response, not surprisingly, was extremely staggered by tiers. Th e wholesalers surveyed deemed the services they provided to be of great value for retailers. Larger producers were primarily happy with the system; smaller ones believed they might get more play without it. Buyers were torn and one wonders if they were divided on the issue based on the size of their operations. In talking through the results with wholesalers, many said that the services they provided—transportation, temperature control, tax collection and category management among others—clearly justifi ed the cost. Th ey also noted that most operators wouldn’t have the fi nancial means, time or logistical ability to make alcoholic beverage purchases directly. Th ey added that the big boys would have undue advantages that might eventually run smaller retailers out of business. While it’s possible that national chains might initially benefi t from the circumvention— or complete elimination—of the wholesale tier, it’s not clear whether the same is true for medium-size and independent operators, as well as retailers. Many may not have the cash fl ow, storage space or wherewithal to off er a wide selection without the help of their wholesaler partners. I welcome your feedback on this issue. Cheers! Liza B. Zimmerman Editor-in-Chief recent report entitled Elimination of the Th ree Tier System: Analysis of Risks and Opportunities by Stephen Rannekleiv, Executive Vice President, Group Publisher Charles Forman Tel (845) 426-6072 cforman@m2media360.com Editor-in-Chief Liza B. Zimmerman Tel (415) 839-5062 5 Third Street, Suite 820 San Francisco, CA 94103 Lzimmerman@m2media360.com Managing Editor Jeremy Nedelka (203) 855-8499 ext. 213 jnedelka@m2media360.com Art Director Kathleen Sage Tel (415) 513-5214 ksage@m2media360.com Production Director Mary Jo Tomei Tel (760) 318-7000 ext. 220 mtomei@m2media360.com Contributing Editors Johnny D. Boggs, Lew Bryson, Erin Fitzpatrick, Michelle Paolillo Lockett, Monica Kass Rogers, Lucy Saunders, Carolyn Walkup, Deborah Parker Wong Associate Publisher Anthony Bongiovanni Tel (248) 253-0108 tbongiovanni@m2media360.com Senior Regional Sales Managers Mark Marcon Tel (248) 761-6231 mmarcon@m2media360.com Jeanette Sims Tel (415) 383-1762 jsims@m2media360.com Debbie Rittenberg Tel (215) 860-0306 drittenberg@m2media360.com List Rental & Reprints Cheryl Naughton Tel (678) 292-6054 cnaughton@m2media360.com M2MEDIA360 President/CEO Marion Minor Vice President, Finance and Operations Gerald Winkel Vice President, Circulation and Collateral Services Joanne Juda-Prainito Tel (630) 543-0552 jjuda@m2media360.com Corporate Conference Director Cheers Beverage Conference Katie Smith Tel (440) 625-0597 ksmith@m2media360.com Production & Operations Director Mary Jo Tomei Cheers® is published by The Beverage Information Group, a division of M2MEDIA360 Editorial and executive offices at 17 High Street, 2nd Floor Norwalk, CT 06851 Tel (203) 855-8499 • Fax (203) 855-9446 6 | MAY 2011 www.cheersonline.com CRISTINA TACCONE