I have to agree. You can sell anything you own, but you don't own the right to future products.

Now if you were compelled to purchase additional allocations, I think it would be different and would be a complied agreement or contract.

Since you don't have to buy, they don't have to sell.

quote:

Originally posted by Polymer:
You're not sure or you don't agree with it?

Whether I agree or not isn't the question. The question is is there a legal basis for discontinuing an ongoing pattern of trade based on established guidelines based solely on a consumer's resale of the product. It's simply a legal question. I totally understand how, for people who want to purchase these products directly from the source at the lowest possible price, the concept of people getting the wine instead of them and re-selling it can be a pisser. I sympathise.

They absolutely have the right to sell to whomever they wish.

I'm pretty sure they don't publish any criteria and there is no implied contract at all. I'm pretty sure they have all stated they can allocate however they want to.

I'm looking for an opinion or case law from an anti-trust lawyer and people with specific knowledge of what the agreements say or don't say. As far as an implied contract is concerned, lacking a specific document binding buyer and seller, this is one of my key questions. Does a pattern and history of trade and of allocation of product based on a publicly understood formula constitute an implied contract? The answer to this question is at the core of the controversy, imo.... I'm pretty sure I don't have that answer!

PH

quote:

Originally posted by PurpleHaze:

quote:

Originally posted by Polymer:
You're not sure or you don't agree with it?

Whether I agree or not isn't the question. The question is is there a legal basis for discontinuing an ongoing pattern of trade based on established guidelines based solely on a consumer's resale of the product. It's simply a legal question. I totally understand how, for people who want to purchase these products directly from the source at the lowest possible price, the concept of people getting the wine instead of them and re-selling it can be a pisser. I sympathise.

They absolutely have the right to sell to whomever they wish.

I'm pretty sure they don't publish any criteria and there is no implied contract at all. I'm pretty sure they have all stated they can allocate however they want to.

I'm looking for an opinion or case law from an anti-trust lawyer and people with specific knowledge of what the agreements say or don't say. As far as an implied contract is concerned, lacking a specific document binding buyer and seller, this is one of my key questions. Does a pattern and history of trade and of allocation of product based on a publicly understood formula constitute an implied contract? The answer to this question is at the core of the controversy, imo.... I'm pretty sure I don't have that answer!

PH

All the anti-trust laws including the Sherman Act revolve around whether or not they are restricting competition or decreasing output of the competition.

I hardly think SE kicking someone off their list for flipping is effecting their competition whatsoever.

They have the right to sell or not sell to whoever they want to for whatever reasons they want to.

There is in no way any manipulation of the wine market going on by SE kicking off flippers. To even think there is any fault there is somewhat ridiculous in my opinion.

T Dub, I'll assume you're an anti-trust lawyer and defer to your wisdom if that is the case. Perhaps this isn't the area of law which might apply in this case.

Here's an analogy that will resonate with many here:

Elmer is a loyal Starbucks customer. For years, he has been the first one in the door when the outlet opens so he can get a cup of coffee and a couple of his favorite black truffle scones (I'm making this one up...) It is understood that these scones are very rare, and that the outlet only has 6 available for sale each day, with a 2 per customer limit. First come first served.

Over the years, Elmer doesn't miss a day even though over the years Starbucks has raised the price of the black truffle scone many, many times. Lately, Elmer has fallen on harder times, so although he continues to be first in line to get his 2 pastries, he eats one and takes the other out to the sidewalk and sells it to a late arrival for twice what he paid for it.

Starbucks, finding out that Elmer has resold the scone refuses to sell additional pastries to him solely on the basis that he isn't eating both but is selling one for a profit.

Justified? Legal?

PH

quote:

Originally posted by PurpleHaze:
T Dub, I'll assume you're an anti-trust lawyer and defer to your wisdom if that is the case. Perhaps this isn't the area of law which might apply in this case.

Here's an analogy that will resonate with many here:

Elmer is a loyal Starbucks customer. For years, he has been the first one in the door when the outlet opens so he can get a cup of coffee and a couple of his favorite black truffle scones (I'm making this one up...) It is understood that these scones are very rare, and that the outlet only has 6 available for sale each day, with a 2 per customer limit. First come first served.

Over the years, Elmer doesn't miss a day even though over the years Starbucks has raised the price of the black truffle scone many, many times. Lately, Elmer has fallen on harder times, so although he continues to be first in line to get his 2 pastries, he eats one and takes the other out to the sidewalk and sells it to a late arrival for twice what he paid for it.

Starbucks, finding out that Elmer has resold the scone refuses to sell additional pastries to him solely on the basis that he isn't eating both but is selling one for a profit.

Justified? Legal?

PH

Wow, PurpleHaze, you are very interested in this.

quote:

Originally posted by PurpleHaze:
T Dub, I'll assume you're an anti-trust lawyer and defer to your wisdom if that is the case. Perhaps this isn't the area of law which might apply in this case.

Here's an analogy that will resonate with many here:

Elmer is a loyal Starbucks customer. For years, he has been the first one in the door when the outlet opens so he can get a cup of coffee and a couple of his favorite black truffle scones (I'm making this one up...) It is understood that these scones are very rare, and that the outlet only has 6 available for sale each day, with a 2 per customer limit. First come first served.

Over the years, Elmer doesn't miss a day even though over the years Starbucks has raised the price of the black truffle scone many, many times. Lately, Elmer has fallen on harder times, so although he continues to be first in line to get his 2 pastries, he eats one and takes the other out to the sidewalk and sells it to a late arrival for twice what he paid for it.

Starbucks, finding out that Elmer has resold the scone refuses to sell additional pastries to him solely on the basis that he isn't eating both but is selling one for a profit.

Justified? Legal?

PH

I'm not an anti-trust lawyer but deal with the issues it seems daily in my work. So much in fact that my company sends us to an anti-trust seminar yearly to make sure we are in no way violating the laws or the Sherman Act. You don't hear about it much but it is a VERY serious offense if your caught.

As far as Elmer. Where do I start with that? lol. When I have a few moments to formulate a thought I'll get back to you on it.

quote:

Originally posted by spo:
Wow, PurpleHaze, you are very interested in this.

Heh...heh...

Less with this specific matter than with the overall concept. I don't really care one way or the other about flippers. I don't (nor will I) flip wines. Most of the wines that are being flipped for profit aren't on my acquisition radar anyway. I certainly have purchased wines from private sellers at well over their release prices. I make an informed decision based on the value of the wine and my desire to own it. I don't think the sellers deserve to have their access restricted based on the fact that they sell their personal property for more than they paid for it. The concept just rubs me the wrong way.

PH

PH- corporate finance and M&A.

As for the question, SE can argue successfully, that if there are additional profits to be made from the sale of goods, THEY should be the beneficiaries. The cost that they place on the goods is effectively a subsidy, to ensure that more people have access to the wine. If they wanted to see their wine command top dollar, they would go to an auction format for all bottles, to maximize profit.

As seller of the goods, they can limit who they sell the good to, and at what quantity. Previous purchase history does NOT establish a right to purchase goods in perpetuity.

There are strong public policy arguments in favor of being able to restrict one's ability to resell a subsidized good for a substantial profit. Low income housing at a reduced market rate is with the caveat that the recipient of the reduced market good will not be able to turn around and sublease the apartment at- or close to- full market value and capitalize on the profit. By charging $750 for a good that can command upwards of $1300, Screaming Eagle is effectively doing the same, subsidizing the bottles to ensure that more people have access to them. What they are not subsidizing is someone else's business.

quote:

Originally posted by TPEwinedrinker:
By charging $750 for a good that can command upwards of $1300, Screaming Eagle is effectively doing the same, subsidizing the bottles to ensure that more people have access to them. What they are not subsidizing is someone else's business.

I don't know about that. If they raised their price to $1300 a bottle how much of their list would remain?

quote:

Originally posted by spo:

quote:

Originally posted by TPEwinedrinker:
By charging $750 for a good that can command upwards of $1300, Screaming Eagle is effectively doing the same, subsidizing the bottles to ensure that more people have access to them. What they are not subsidizing is someone else's business.

I don't know about that. If they raised their price to $1300 a bottle how much of their list would remain?

Considering that probably half of the bottles out there get resold, and the average price is $1300, I am guessing they would still sell ALL of their bottles. Not sure why you would think otherwise.

Considering that probably half of the bottles out there get resold, and the average price is $1300, I am guessing they would still sell ALL of their bottles. Not sure why you would think otherwise.[/QUOTE]

I think if they could sell all their bottles at that price they would.

While if they sold half their stock at nearly twice the price I realize that alleviates risk, but on the other hand they have to deal with people questioning whether their wine is worth it at that price.

Probably half? I have no way of knowing how acurate that is.

quote:

Originally posted by SPO:

I think if they could sell all their bottles at that price they would.

While if they sold half their stock at nearly twice the price I realize that alleviates risk, but on the other hand they have to deal with people questioning whether their wine is worth it.

And you don't think people already ask those questions at $750/bottle? That logic doesn't make any sense SPO.

Of course they ask that question, but the higher the price the more pressure applied and the least likely the answer to the question will be in Screaming Eagle's favor.

quote:

Originally posted by spo:
Of course they ask that question, but the higher the price the more pressure applied and the least likely the answer to the question will be in Screaming Eagle's favor.

I beg to differ... The people that strictly want the Screaming Eagle as a trophy wine will want it even moreso because of the fact that it is now MORE expensive... Why has there been a sea-change in the tastes of the Chinese market from Bordeaux to Burgundy? Did everyone all of a sudden say, "I think my palate is now too sophisticated for Bordeaux... Burgundy offers that nuanced complexity." Or did they simply look at the price tag and say, "Burgundy is more expensive" and therefore a more conspicuous display of wealth.

quote:

Originally posted by TPEwinedrinker:

Why has there been a sea-change in the tastes of the Chinese market from Bordeaux to Burgundy? Did everyone all of a sudden say, "I think my palate is now too sophisticated for Bordeaux... Burgundy offers that nuanced complexity." .

It is actually a plausible scenario if you consider where they are on their wine connosueir evolution. That shit comes along with the high price as well. Wine drinkers pat themselves on the back for their sophisticated tatse all the time. Certainly the Chinese are capable of this as well. Eventually they may even take pleasure in announcing a $750 bottle of burgundy that is better than a $2000 bottle.

quote:

Originally posted by spo:

quote:

Originally posted by TPEwinedrinker:

Why has there been a sea-change in the tastes of the Chinese market from Bordeaux to Burgundy? Did everyone all of a sudden say, "I think my palate is now too sophisticated for Bordeaux... Burgundy offers that nuanced complexity." .

It is actually a plausible scenario if you consider where they are on their wine connosueir evolution. That shit comes along with the high price as well. Wine drinkers pat themselves on the back for their sophisticated tatse all the time. Certainly the Chinese are capable of this as well. Eventually they may even take pleasure in announcing a $750 bottle of burgundy that is better than a $2000 bottle.

Not when they are spiking said bottles with Cherry Coke.

None of those guys drink wine without soda? Impressive.

quote:

Originally posted by TPEwinedrinker:

quote:

Originally posted by spo:

quote:

Originally posted by TPEwinedrinker:
By charging $750 for a good that can command upwards of $1300, Screaming Eagle is effectively doing the same, subsidizing the bottles to ensure that more people have access to them. What they are not subsidizing is someone else's business.

I don't know about that. If they raised their price to $1300 a bottle how much of their list would remain?

Considering that probably half of the bottles out there get resold, and the average price is $1300, I am guessing they would still sell ALL of their bottles. Not sure why you would think otherwise.

If you look at what has happened at wineries like Harlan, Spo makes a valid point. They kept raising their price until it met the resale price and all of a sudden the wait list dissappeared and they stopped selling through. The percieved scarcity made them very attractive. People who would pay $500 a bottle on the secondary market wouldnt pay $500 a bottle direct from the winery. I expect Scarecrow is going to learn this very soon.

quote:

Originally posted by LBJ2012FinalsMVPisclutch:

quote:

Originally posted by TPEwinedrinker:

quote:

Originally posted by spo:

quote:

Originally posted by TPEwinedrinker:
By charging $750 for a good that can command upwards of $1300, Screaming Eagle is effectively doing the same, subsidizing the bottles to ensure that more people have access to them. What they are not subsidizing is someone else's business.

I don't know about that. If they raised their price to $1300 a bottle how much of their list would remain?

Considering that probably half of the bottles out there get resold, and the average price is $1300, I am guessing they would still sell ALL of their bottles. Not sure why you would think otherwise.

If you look at what has happened at wineries like Harlan, Spo makes a valid point. They kept raising their price until it met the resale price and all of a sudden the wait list dissappeared and they stopped selling through. The percieved scarcity made them very attractive. People who would pay $500 a bottle on the secondary market wouldnt pay $500 a bottle direct from the winery. I expect Scarecrow is going to learn this very soon.

That is why I originally stated that if they wanted to maximize profit, they would just go to an auction style for all bottles.

And Screaming Eagle has always been considered more "coveted" and "elusive" than Harlan.

quote:

Originally posted by TPEwinedrinker:
PH- corporate finance and M&A.

As for the question, SE can argue successfully, that if there are additional profits to be made from the sale of goods, THEY should be the beneficiaries.

The only way this argument holds any water is if they actually raise their prices. Again. Otherwise, it's a straw man.

The cost that they place on the goods is effectively a subsidy, to ensure that more people have access to the wine.

Ah.... So SE's $750 a bottle offering price is an altruistic, egalitarian effort to offer more of their wines to the unwashed masses? Sorry, you'll have to sell that story somewhere else, TPE. Their offering price is a shrewdly calculated figure, based on their diminishing wait list, the potential for continued sellouts even in poor vintages and the very real possibility that their current per bottle offering price will not hold for long. They cannot reduce their offering price without losing significant face, and alienating their long time buyers.

As seller of the goods, they can limit who they sell the good to, and at what quantity. Previous purchase history does NOT establish a right to purchase goods in perpetuity.

No argument here. However, as with almost all highly allocated wines, continued purchases at minimum required quantities almost always ensure continued access at a specified level.

There are strong public policy arguments in favor of being able to restrict one's ability to resell a subsidized good for a substantial profit. Low income housing.....of $1300....

This argument only applies in the public sector, when tax dollars are involved. The only time capitalists subsidize the purchase price of their product is when it's not selling at the list price.

Screaming Eagle is effectively doing the same, subsidizing the bottles to ensure that more people have access to them.

Again, I call foul. They are selling every bottle they have already. They're not opening up the market to much new blood at this tariff. They could offer their latest hot vintage at $1000 a bottle, but then what would they do when a rainy, cool and green harvest makes their wines even more ordinary than they are? Lower prices? Offer a rebate? Or a two for one special???

PH

This message has been edited. Last edited by: PurpleHaze,

quote:

Originally posted by TPEwinedrinker:

quote:

Originally posted by LBJ2012FinalsMVPisclutch:

quote:

Originally posted by TPEwinedrinker:

quote:

Originally posted by spo:

quote:

Originally posted by TPEwinedrinker:
By charging $750 for a good that can command upwards of $1300, Screaming Eagle is effectively doing the same, subsidizing the bottles to ensure that more people have access to them. What they are not subsidizing is someone else's business.

I don't know about that. If they raised their price to $1300 a bottle how much of their list would remain?

Considering that probably half of the bottles out there get resold, and the average price is $1300, I am guessing they would still sell ALL of their bottles. Not sure why you would think otherwise.

If you look at what has happened at wineries like Harlan, Spo makes a valid point. They kept raising their price until it met the resale price and all of a sudden the wait list dissappeared and they stopped selling through. The percieved scarcity made them very attractive. People who would pay $500 a bottle on the secondary market wouldnt pay $500 a bottle direct from the winery. I expect Scarecrow is going to learn this very soon.

That is why I originally stated that if they wanted to maximize profit, they would just go to an auction style for all bottles.

Auction style is fine if thats what they want but its not all selling at $1300 a bottle just like the list wouldnt sell through at $1300 a bottle. The percieved scarcity makes it more attractive. Its dumb but thats how people are.

quote:

Originally posted by TPEwinedrinker:
That is why I originally stated that if they wanted to maximize profit, they would just go to an auction style for all bottles.

If they put 100% of their inventory on auction it would lower their price to $600 a bottle and they know it.

PH- you kinda lost me:

quote:

Originally posted by PurpleHaze:

The only way this argument holds any water is if they actually raise their prices. Again. Otherwise, it's a straw man.
They have raised their price continuously... From $50 up to $750... The wine still fetches a hefty premium on the secondary market. There is a well-established track record that the maximum resistance point is far north of what they are currently charging.

They cannot reduce their offering price without losing significant face, and alienating their long time buyers.
Who said anything about LOWERING their offer price? I said that they are keeping the price artificially low on a strict supply-and-demand curve.

This argument only applies in the public sector, when tax dollars are involved. The only time capitalists subsidize the purchase price of their product is when it's not selling at the list price.
Not true... Artists, designers, chefs, etc.... many of them charge far less for their goods than they could realize on a strict supply-and-demand curve. I have frequently heard several small business owners who have kept prices below what the market will bear to ensure greater access to the good. It doesn't mean that they are therefore permitting the customer to make up that difference between what the original seller is charging and what the market will bear.

They could offer their latest hot vintage at $1000 a bottle, but then what would they do when a rainy, cool and green harvest makes their wines even more ordinary than they are?
Probably still charge $1000/bottle and probably still sell out... Have any of their bottles gone for south of $1000 on the secondary market even in "off" vintages?

PH

quote:

Originally posted by spo:

quote:

Originally posted by TPEwinedrinker:
That is why I originally stated that if they wanted to maximize profit, they would just go to an auction style for all bottles.

If they put 100% of their inventory on auction it would lower their price to $600 a bottle and they know it.

What evidence do you have that this in any way would happen? They are currently selling all of their wine at $750/bottle, and it routinely sells on the secondary market for four figures... Why do you think an auction format would suppress the actual cost of the wine? One Russian oligarch, for whom money is no object, would have no problem buying up the entire lot even as prices soared above $5000/bottle. Please articulate your position SPO.