Entries Tagged 'government' ↓

Begging for Deregulation

Napa Valley is probably gorgeous this time of year. I know its gorgeous in February. I’ve been there then. It is also a long way from my home town of Louisville, KY. That’s what makes it difficult for me to go to my favorite winery (Beaulieu Vineyard if your keeping track, their Rutherford Cab is dollar for dollar the best Cab I have ever had) and pick up a couple of bottles for the week. Instead I have to go to the store and search through there selections, hoping and praying that they carry BV’s Rutherford Cab, or the Luna Sangiovese that I yearn for. I freaking HATE this.

The government is currently living in 1933. This industry is regulated by a three tier system, which basically says the maker can’t sell directly to the consumer.

Three Tier System

What this has created is an oligopoly in the middle of this system. There are only a handful of distributors across the country, and it seems like a market that is very, very difficult to penetrate, but I could be wrong.

Why does all this matter? Here is the part that I HATE.

Because it means as a consumer, I can’t go to my store and buy my favorite wine because the distributor sitting in the middle tier decides what it will distribute to the stores selling the wine. They give the store choices, but they definitely are making recommendations and structuring pricing in a way that is maximizing their shareholder value. This especially kills the smaller players that are producing the products. It also drives up prices unnecessarily so that consumers are paying more for goods just because of the system in place. This begs for deregulation so that pricing can become more competitive, and consumers will immediately reap the benefits. It also would eliminate this hogwash with being able to ship to consumers in certain states, and othes having strict regulations against it. You can see what I’m talking about at Free the Grapes. Its a total cluster. Sign up for your state if your screwed like me.

This regulation made sense after prohibition because of market conditions. It doesn’t make sense now. Here is to thinking that the government will stick its nose into something needing regulation, and get out of places where it is unnecessary. Have you seen Exxon’s last 3 quarters?