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Would I-1100 and I-1105 Hurt Small Wineries?

In an ad opposing I-1100 and I-10105,Washington wine maker Darby English claims that both initiatives will “make it more difficult for small wineries like mine to compete. And it will allow big retail corporations to push our products off the shelf.” We think the claim lacks merit.

Darby may be alluding to slotting fees, “payments made by food producers and manufacturers to purchase shelf space in retail stores.”  However, according to Paul Beveridge, president of Family Wineries of Washington State, federal and state alcohol and antitrust laws prohibit slotting fees. In 1995, the U.S. Bureau of Alcohol, Tobacco and Firearms adopted regulations “that ban slotting allowance practices in the retail sale of alcohol beverages (60 Federal Register 20402)” (pdf).

It is possible that Darby is alluding to the fact that the current regulatory structure prohibits volume discounts. Small wineries feel protected by the current law. According to John Guadnola, executive director of the Washington Beer and Wine Wholesalers Association, “uniform pricing means a grocery store pays the same whether it buys one bottle or 100 bottles.”

The bottom line, according to King 5 News:

There’s nothing stopping retailers from pushing small wineries off the shelf today.  And there’s nothing in these initiatives that would give stores more power to push out small wineries.  What is a legitimate debate is whether allowing volume discounts would create incentive to carry only the most popular wines and beers.  And each store and chain would make its own decisions on what customers value more:  price or selection.

Learn more about Initiative 1100 and Initiative 1105.

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