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07.10.2007

How to Win Friends in the Wine Business

It never ceases to amaze me how people tend to forget that they are just customers. I'm guilty of this too, sometimes, but we tend to start thinking that we're entitled to buy whatever it is that we're buying, and we forget that being able to buy the things we want is a privilege that comes with strings attached. We have to hold up our end of the bargain to be good customers, and we also have to remember that even when we do, the folks selling us what we want are not obligated to keep doing so, especially if they can get better customers than us.

Which is what, I suppose, the signs that read "No Shirt, No Shoes, No Service" are all about at the end of the day.

With this in mind, I find it completely outrageous that a wine company called Bordeaux Magnum has actually sued Chateau Latour because Latour has decided not to sell them as much wine as they have in previous years. Even more outrageous, however, is the fact that a judge let this company win the case. Latour is now being forced to pay this company nearly $50,000 in damages.

Say what !?! This is the equivalent of me suing the San Francisco Opera for not offering to sell me season tickets again this year. Where is the contract that says they have to even sell me anything at all? It doesn't exist.

And as so correctly pointed out by a blog post by the guys over at Decanter, when was the last time any wine producer got to sue a negociant for not buying all the wine in a bad vintage?

This lawsuit smells, and sets a horrible precedent for everyone concerned. But mostly it makes me never, ever want to buy anything from Bordeaux Magnum. And I'm guessing (hoping?) there are a lot of people who won't want to be selling them anything either.

Comments (14)

John wrote:
07.10.07 at 11:05 PM

Well then, tell them how you feel! The crust, to not even have a web site!

How much is postage to France?

Bordeaux-Magnum

Country: France
Notes: Bordeaux. Specializing in Grand Crus Classe, futures and old vintages.
Internet: No Web site
Address: 3 rue Gobineau, 33000 Bordeaux
Contact: Tel: + 33 (0)5 56 48 00 06
Fax: +33 (0)5 56 81 73 41

jim wrote:
07.11.07 at 2:31 AM

gee, imagine that, a FRENCH company screwing an american again....if it were not for their wine, there would be no reason for them...

Anonymous wrote:
07.11.07 at 7:24 PM

Golly, I guess I should sue Kistler and Harlan Estate and Shafer for not putting me on their mailing lists. The nerve!

I guess I should have to continue to buy verticals of every wine I ever purchased, just to be fair.

Carl wrote:
07.11.07 at 11:05 PM

jim,

Those French, always coming up with these frivolous lawsuits, unlike us righteous Americans. Well, at least they've stopped trying to take over the world and left that to more capable empires. Seriously, racist comments don't really belong here -- or anywhere.

Seerak wrote:
07.13.07 at 12:30 PM

Carl: tilting at windmills as you are doing doesn't belong here either. If there is any concern with race in here so far, it's yours.

Carl wrote:
07.13.07 at 1:46 PM

Seerak,

"if it were not for their wine, there would be no reason for them..."

Well, maybe you're right. It's not exactly the right forum. I guess whenever I hear that kind of idiocy, I just picture trying to explain to my four-year-old why so many Americans think there's "no reason for" him to exist, (which will be really confusing since he's an American too). On the other hand, if jim's sentence had been "those Mexicans, if it were not for their tacos, there would be no reason for them...", I don't think my response would seem so extreme. For some reason, it's always OK to say things about the French that we would never say about anybody else. I have a feeling it's because the French have the "gaul" to be almost as arrogant as we Americans are. Well, at least they can make wine... right...?

(Sorry Alder, I'll get down off my soapbox now and go eat my freedom fries.)

Alder wrote:
07.13.07 at 2:16 PM

Carl,

Thanks for your thoughtful comments. I don’t think you're being unreasonably sensitive. Jim's comments were, if not racist, certainly pejorative. Whether he was just being hyperbolic or whether he actually thinks the French should be wiped off the face of the planet, it's not clear. I would hope it's the former, but that doesn't mean you can't speak out and say that you find them somewhat offensive.

I do agree with all that this is not the right forum for discussions of racism or the rights of one country or another to exist, so I'd appreciate everyone letting the issue drop.

tina wrote:
07.13.07 at 10:04 PM

When "push comes to shove" this is just a ridiculous lawsuit and a more ridiculous decision by the judge. Gee, if I had known that I could sue for such absurd reasons, I would surely have sued William-Selyem for making me wait for two years just to get on the mailing list! (I would like to know however, if there was some kind of contract involved that was breached by the seller's refusal)...

Kevin wrote:
07.14.07 at 11:01 PM

It's just annoying that the court ruled to the favourite of the buyer instead in a neutral point. Afterall, it's free business, and the volume of wine produced for certain vintage is just unpredictable.

ScottS wrote:
07.15.07 at 5:35 PM

This sounds like a bogus lawsuit.

However, there have to be some limits on how producers create the illusion of scarcity and potentially manipulate the market for aged wine to their advantage. For library wines, the wineries who strategically hold large quantities of unsold stock (especially in a high yield, high quality vintage) end up in price competition with some of their original customers on the secondary market. That's OK so long as they don't say one thing to sell the wine the first time and then change their story. That would be using their position as monopoly supplier -- only Latour makes Latour -- to disadvantage competition, bringing up antitrust law issues.

In other words, I don't think it should be legal for suppliers *lie* about the production levels and inventory of a collectible good in pursuit of profit maximization in the future. If they say "240 cases produced" when it was really 300, that's unfair. If they don't want to sell their whole production in the same allocations as in the past, that's their prerogative, but nor should they be able to spread bs around in a way that improves their market power to the detriment to consumers.

Now, I don't have the foggiest idea if Latour or anyone else has actually tried to game things that aggressively, but since it is in their economic interest to do so, at the very least I bet some folks have multiple cases stashed in the cellar off the books.

It seems to me that mailing list wines are not as scarce as consumers probably perceive them to be. Most waiting lists are quite short -- less than a year -- but that wait, combined with minimal retail exposure, make the wines feel more rare and exclusive, creating value. This is fine. Now that I own some collectible mailing list wines, the producer and I share an interest in maintaining that value...

Alder wrote:
07.15.07 at 10:21 PM

Scott,

It seems to me that the world had best go after DeBeers before they go after winegrowers for such tactics.

John Nezlek wrote:
07.15.07 at 11:53 PM

Would anyone who has read the decision and the basis for the suit and the ruling care to comment? If all anyone knows of this is the summary provided by Decanter.com, I am not certain how useful comments can be. And anyway, what real difference does or can it make?

Jerry D. Murray wrote:
07.16.07 at 11:23 AM

Don't think this sort of thing doesn't happen in the U.S.! In some states a winery cannot fire a distributor, Mass. for instance requires a producer to sell a distributor what they purchased the previous year... plus 10%. Nor do they allow us to directly compete with them by banning direct shipments.

In regards to ScottS's comments; it sounds like you are asking wineries not to dabble in marketing altogether... good luck with that.

Alder wrote:
07.16.07 at 8:03 PM

John,

Thanks for the thougts. We comment not to be useful but to explore the issue. I don't think anyone is laboring under the illusion that our discussion here is going to impact the world at all.

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