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An Open Letter to Warren Buffett, Wine and Spirits Distributor

Dear Mr. Buffett,

Congratulations on your purchase of Empire Distributing, and roughly 25% of the wine and spirits distribution business in Georgia and North Carolina that came with it. And welcome to the wine and spirits world -- we need more enlightened business people in this industry.

I can't say that I've followed your career with precision, but I've read a decent amount about you, and try to read the Berkshire Hathaway Annual Report every year. After all, I'm one of your shareholders, and I learn a lot from you and Charlie Munger.

In everything I've read, you strike me as someone who appreciates fairness, competition, and above all, the power of the marketplace to improve everyone's situation if it is left alone to work well. Given the choice between heavy handed regulation and deregulation, you strike me as a deregulation kind of guy, especially when it frees consumers to vote with their dollars.

I'm sure it hasn't escaped you that the wine and spirits distribution marketplace that you just bought into is seriously screwed up. For instance, we can start with the fact that you can't get any more than 25% of the market share in Georgia because of their particular state liquor franchise laws -- regardless of whether you offer better products, better service, and better prices to your customers.

Likewise you'll find yourself hobbled as you move into other states, and completely prevented from moving into others, thanks to state-run monopolies on liquor distribution, sweetheart deals that are designed to keep out competition, and all manner of regulations that will keep you from being able to serve wine and spirits drinkers that would certainly like to broaden their horizons and have access to different kinds of products that you might offer.

Of course, those facts can't have escaped you any more than the fact that in the past 20 years we've gone from roughly 7000 different wine and spirits distributors in this country to only 700. I'm not sure whether that was part of the growth potential you saw in Empire when you picked it up this week, but I imagine it factors in somewhere.

So let me get to the point. I think you now have the opportunity, and the obligation, to get on board with those of us who think the time has come to throw out the prohibition-era, antiquated laws we've got on the books and put something rational in place that benefits both consumers and business owners like yourself.

In short, I urge you to renounce membership to the Wine and Spirits Wholesalers of America, and instead support the efforts of those like Free the Grapes and the SWRA who are trying to turn this country into a real wine and spirits marketplace. We need a marketplace where companies can compete to meet consumer demands without meddling by state bureaucracies and cronyism. We need businesses more interested in growing the overall market, than using scare tactics and BS to protect their little slices of it.

All the analysts say that with this purchase you're betting on the Millennials as the largest wine drinking generation in decades. That seems like a pretty good bet to me. And since these young wine drinkers are more interested in a diverse, wide range of products and services, I hope you'll join those of us who want to expand choice and buying opportunities in the market.

Raising my glass to you,

Alder Yarrow

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Required Reading for Wine Lovers

The Oxford Companion to Wine by Jancis Robinson Wine Grapes The World Atlas of Wine by Hugh Johnson to cork or not to cork by George Taber reading between the vines by Terry Theise adventures on the wine route by Kermit Lynch Love By the Glass by Dorothy Gaiter & John Brecher Noble Rot by William Echikson The Science of Wine by Jamie Goode The Judgement of Paris by George Taber The Wine Bible by Karen MacNeil The Botanist and the Vintner by Christy Campbell The Emperor of Wine by Elin McCoy The Taste of Wine by Emile Peynaud