I suspect it's thier continuing effort to find price equalibrium. If there is a secondary market it means there are people on the waiting list who would pay even more than the $750/bottle. S.E. would benefit from cleaning out people from the list who are doing the 'flipping' by getting directly to the 'flip-receiver' and then raising the base price, capturing more of the revenue themselves.
The simple way to do this of course is to keep raising the price and letting the flippers fall out but as G.A. pointed out that has imploded on Colgin and Harlan.
Paul Romero (tlily)- Owner, Winemaker, Tour Guide
Each winery has to figure out what's best for them. Back in the days, Harlan kept very close eyes on the secondary market price and eventually decided to push the release price envelop to the $500 now it's sitting at. Result? It's anyone's guess on how much back inventory they are sitting on. At $500, it's rendered buying Harlan like buying a new car, as soon as you make the purchase, you are losing money on your investment. Harlan is in essence in the same class with 99% of all the other domestic wines made today, at least based on the investment theory.
With Screaming Eagle, if they really want to push the price envelop, there is a bit more room left. If and when they do hit the $1,000 mark on mailing list offer, it would be interesting to see what happens. Of course, actual production level would also factor into this conversation, Screaming Eagle production is likely to go up overtime, and the question is how much.
At the end of day, wineries need to figure out how much of all these free publicity and marketing due to secondary market flip is worth to them.
Here is a good case study. Screaming Eagle released a very small amount of 2010 Sauvignon Blanc at $250 a bottle I believe. We had a six-pack OWC of this hammered in our Hong Kong Live Auction back in June for $13,000. After factoring in buyer's premium, the per bottle cost is over $2,500. Now the question is, what should be the release price Screaming Eagle charges for the 2011 Sauvignon Blanc release?
Was it Vince Young that bought the six pack?
How can SE find people on their list that are flipping the wine? That would cost money in personal and possible legal fees. Can't believe they think it would be worth it. If they do remove people on the list, does it mean that I will finally get some wine after being on the wait list since 2007? I doubt it.
hey...didn't harlan at one point put serial number on each bottle if i recall.....
I've personally talked with a guy at one of the wineries listed above, and he isn't bothered by folks who share their allocation with friends at cost. They do not like flippers, though.
edit--whoops! guess I'm waay behind in this discussion.
Has PH figured it out yet?
It's amazing how long this discussion has gone on and yet stayed civil.This message has been edited. Last edited by: Redhawk,
Stay thirsty my friends.
There is one more readily flippable wine I forgot to add to the list. Marcassin.
"One may dislike carrots, spinach, beetroot, or the skin on hot milk. But not wine. It is like hating the air that one breathes, since each is equally indispensable."
Is Kistler flippable any more?
Stay thirsty my friends.
Not really, after figuring in all the cost, you would be lucky to break even on the Chard.
With Pinot, you would still see a bit of return on single vineyards, but with the amount of Chard you have to buy to get the relative few Pinot, it's essentially a wash at best.
Kistler Chards are sitting in several local stores in Dallas waiting to be bought.
True about Marcassin, however I would never sell it because it is just too damn tasty. Part of that, however, is because it is relatively reasonably priced. If Marcassin sold to the mailing list for $500 and you could sell at it auction for $750 I would almost certainly sell some. It would just be too expensive to drink. While winery owners can weed out flippers by raising the price so that it matches the flipping price, one can also keep a lot of loyal customers by maintaining a reasonable price.
I think it's a diabolical scheme to lower secondary market supply, raise secondary market prices, and then raise allocation prices to adjust to "market pressures".
who gives two shits
(FKA: RWSW and redwingstoneware)
Robert Taylor just wrote an article linking this thread:
I think lowering their production will only increase the after market price.
They should do the opposite in my opinion.
They protect the people who really drink their wines.
I would imagine all their wines are numbered nowadays. They only need to look to see on the auction block what serial was put there and who sold it. So what if it goes to 10000$, they put out a message "we only think 300 people really drink our wines, and we'll only give it to those 300"
the lucky few who do drink it will now know they are drinking 10000$ bottles of wine and forces more people to sign up/stay on the list/not flip the wines.
it's a win win no?
This is my sig -> www.brownteacup.com
Perhaps surprisingly, the Screaming Eagle wine bottles are not individually numbered ... yet. Part 2 of my blog, next week, will address, among other things, a few tactics two wineries will be employing in the future to track their flippable wines.
So a representative of Screagle makes this statement in the article, "People are turning it (the Sauv Blanc) over for profit, for their own selfish greed.”
This from a winery selling $250 a bottle Sauvignon Blanc. Anyone else see just a little irony here?
Profit seems to be turning into a four letter word here in the states.
While I've never flipped a bottle for profit, I do frequently share my allocations with friends at cost, as do they with me (including some of the wines mentioned in the thread and article).
I wonder what, if any, recourse one would have with the wineries should a bottle shared with a friend, either at cost or as a gift, turn up on the secondary market when the original purchaser made no profit on it, then the winery cut off the original purchaser.
That's, RedLoverJim to you
The winemakers speak: Flip Happens: For Better of Worse, Not All Wines Are Bought to Be Drunk
"Marcassin's John Wetlaufer, whose 2007 Marcassin Vineyard Pinot Noir (release price $125) is priced as high as $645 at a Los Angeles retailer, doesn't actively patrol the Internet looking for flippers. But when someone on the waiting list wrote to say that he had been offered a mailing-list member's allocation of the most recent release at a mark-up, asking if it was OK for him to buy it, Wetlaufer took action. "We sent him a letter saying, 'You don’t have to buy it from him, you can buy it from us,' and we purged the reseller, and we sent him his check back, and he got furious," he sighed. "
This is my sig -> www.brownteacup.com
1. No implied contract - unless they specifically told you this year that your allocation will not be reduced if you flip the wines and now change their mind - in which case you could at least argue you bought your allocation based on that and either there was an implied contract or the winery should be estopped from changing courses. Course of conduct will not be sufficient IMO unless they specifically told you that wine could be flipped.
2. They can certainly reduce allocations for whatever reason they want, including flipping
3. As long as they are not refusing to sell on the basis of race, gender, age or disability - they can basically sell or not sell to whoever they want on whatever terms they want - assuming that all high end wineries have not gotten together in a secret room and (a) agreed on how to price their wines; (b) agreed to impose restrictive purchasing terms on consumers; or (c) divided the market geographically and limited sales.
I am not an anti-trust lawyer (1 class 16-17 years ago in law school hardly gives me much additional insight), but that is where I fall on this issue. Obviously whether I think it is a good business practice on their part is a totally different story and I stopped buying from a number of wineries when I did not like how they were doing their allocations.
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