Screaming Eagle removed mailing list members for flipping

John Fones of Cellars 33 posted it up on FB. Apparently confirmed on Berzerkers website... Interesting in light of the release of a second label... If other highly-allocated wineries follow suit, it will be interesting to see the effect on sales.
Original Post
I love John Fones comment on the situation: "In light of the recent stories of folks being removed from the Screaming Eagle mailing list for flipping wines, Cellars 33 would like to announce that if you flip Cellars 33 wines for a profit, you will be... applauded and thanked!" Brilliant!
quote:
Originally posted by PurpleHaze:
It seems to me that anyone who can't flip their wines without getting busted by the winery deserves to lose their allocation.

PH


How would they even find out - I have never seen any traceable factors like serial numbers on the crates or bottles - the only thing I can think of is direct shipment request to a wine store.
clearly nothing is going to affect sales

SQN has a waitlist that's what 7? years long.

If they kick off these guys who are sharing allocations or flipping, guess what, there's clearly more people lined up behind them that would be waiting to buy.
quote:
Originally posted by AML:
Personally, I would like to see more of this, although it would be incredibly difficult to police.


Agreed. You have to be pretty blatant to get busted. I think there also needs to be a distinction drawn between flippers and Good Samaritans. I've bought highly allocated wines at cost from friendly folk who are just looking to spread the wealth. Big difference between flippers and sharers, imo.....

PH
quote:
Originally posted by PurpleHaze:
quote:
Originally posted by AML:
Personally, I would like to see more of this, although it would be incredibly difficult to police.


Agreed. You have to be pretty blatant to get busted. I think there also needs to be a distinction drawn between flippers and Good Samaritans. I've bought highly allocated wines at cost from friendly folk who are just looking to spread the wealth. Big difference between flippers and sharers, imo.....

PH


+1. I have been fortunate to pick up other Members allocations at their cost for things I was looking for, when they wanted to pass. And I am talking about some of these 'Six' that could be flipped for profit
quote:
Originally posted by g-man:
clearly nothing is going to affect sales

SQN has a waitlist that's what 7? years long.

If they kick off these guys who are sharing allocations or flipping, guess what, there's clearly more people lined up behind them that would be waiting to buy flip.
I agree if they made the wine to drink it would not be 750.00 a bottle. After all the first release was 50.00 a bottle. This is a trophy and flippping wine. Charging 750 for it eliminates many mailing list customers from opening them to drink.
quote:
Originally posted by TPEwinedrinker:
I think Stefania is correct in 6 being flippable:
SE
SQN
Marcassin
Saxum
KB
Scarecrow
Of those, I get an allocation of Scarecrow, I am wait listed on SE, and never bothered to sign up for the other 4, although I have bought a couple Saxums and SQNs on the secondary market.


Some of those may be something to flip, but I don't think that's the list. You can pick up Saxum and KB quite easily.

The list might be more like:

SE
Bryant
Harlan
Colgin
Schrader
SQN

Used to include QC, but Tbird killed that.

As far as it being restraint of trade - why?

They can make whatever rules they want for their mailing list. They're not prohibiting people from selling the wine, nor conspiring with their customers to limit the market. You can do whatever you want to with the wine you already have. They haven't restricted in any way what you do with your wine. And you have no "right" to future wine. So who's harmed?

Now if only the Bordelais would adopt that approach.

Oh wait.

That's the entire point of Bordeaux.
You cannot flip Colgin for a profit in most cases. Or Harlan unless they get a 100 point score. I'd be surprised if you could flip Bryant as well. There were hundreds of bottles of Scarecrow for sale on the web for cost last release.

Saxum is available but always above mailing list prices. Don't know about the others.

The only wines that can be flipped almost every time are SE and SQN. That's it.

<possibly Schrader too>
You may be right. What's Colgin going for to mailing list customers?

Schrader sells. I know lots of people who've flipped those.

But farther down the list, I think there are a lot of wines that have schizoid markets. Some people pay a lot on release, then people buy for more than that, and then you see them for far less later on.
quote:
Originally posted by grossie:
There's got to be something illegal about what SE did. It's some sort of restraint of trade, isn't it? I guess they can choose who to sell to, but there's something weird and anti-capitalist in the whole thing.

Agreed. It will be interesting to see what happens when someone finally decides to sue them. And you can be sure, it will happen.
quote:
Originally posted by grossie:
There's got to be something illegal about what SE did. It's some sort of restraint of trade, isn't it? I guess they can choose who to sell to, but there's something weird and anti-capitalist in the whole thing.


I had similar thoughts about the legal aspects of cutting someone off. Remember this recent post from Manfred Krankl, at SQN?:

If we learn that someone is re-selling (a.k.a. flipping) the wines – their divine right from a legal or purely capitalist point of view mind you – we may decrease that person’s allocation in the future because if the person feels the pressure to SELL some of their wine, then we are apparently over-allocating.

Unless there are specific clauses in the agreement between seller and buyer covering this issue, it seems that prohibiting or punishing resale of a product in this matter may border on restraint of trade. Lawyers??

PH
quote:
Originally posted by PurpleHaze:
Remember this recent post from Manfred Krankl, at SQN?:

If we learn that someone is re-selling (a.k.a. flipping) the wines – their divine right from a legal or purely capitalist point of view mind you – we may decrease that person’s allocation in the future because if the person feels the pressure to SELL some of their wine, then we are apparently over-allocating.

PH

Excellent point from M Krankl and he has every right to take that position. It's his wine, his allocation, and there is no 'contract' with the buyer regarding agreed amounts. Completely his call.

Very well played Wink
quote:
Originally posted by PurpleHaze:
quote:
Originally posted by grossie:
There's got to be something illegal about what SE did. It's some sort of restraint of trade, isn't it? I guess they can choose who to sell to, but there's something weird and anti-capitalist in the whole thing.


I had similar thoughts about the legal aspects of cutting someone off. Remember this recent post from Manfred Krankl, at SQN?:

If we learn that someone is re-selling (a.k.a. flipping) the wines – their divine right from a legal or purely capitalist point of view mind you – we may decrease that person’s allocation in the future because if the person feels the pressure to SELL some of their wine, then we are apparently over-allocating.

Unless there are specific clauses in the agreement between seller and buyer covering this issue, it seems that prohibiting or punishing resale of a product in this matter may border on restraint of trade. Lawyers??

PH

It is absolutely not illegal nor actionable. They are not saying you can't resell your wines. They are just saying if we know you are flipping we won't sell any more wine to you... And they have the right to sell their wine to whomever they want.
I would do the same... If I let someone in on my allocation at cost, because they really wanted a particular wine, and I found out they did so just to turn around and flip it, I would never sell to that person again. What they did is not illegal, but I have the right as the seller to not do business with them again. The same holds true for SE.
I dunno, KSC.

Frankly, I don't think most of those flipping SQN or SE are doing it under "pressure," although I'm sure there are some whose financial situations have changed over the years and who would like to stay active on the list until better times. If they're caught selling their wines at release price, would it make any difference to the winery? And so what if they sell for a profit?

Any folk on the SQN or SE lists, did you receive any warnings or make any agreements with the winery regarding resale?

PH
If you have ordered a Ferrari from a factory dealership, the moment you drive a 458 off the lot you can turn around and sell the car and pocket a cool $80G profit. However, Ferrari makes it very clear that if you flip our cars, you will NEVER get another Ferrari from any factory dealership. Is any judge going to hear that case for being blacklisted? Please.
quote:
Originally posted by TPEwinedrinker:
....If I let someone in on my allocation at cost, because they really wanted a particular wine, and I found out they did so just to turn around and flip it, I would never sell to that person again. What they did is not illegal, but I have the right as the seller to not do business with them again. The same holds true for SE.


No argument TPE. I would feel the same way if someone I knew flipped a bottle for profit that I sold them at cost. Don't you think that there are different legal thresholds for an individual and a company when it comes to this kind of thing? I'm trying to come up with an analogous comparison in another industry but can't quite come up with one that's similar enough.

It seems that with most allocated wines, the only requirement that I'm aware of to continue to receive the product is continued purchases at certain levels. If someone decides to use their SE to christen ships as opposed to drinking it, would the winery be justified in cutting them off?

PH
quote:
Originally posted by PurpleHaze:
quote:
Originally posted by TPEwinedrinker:
....If I let someone in on my allocation at cost, because they really wanted a particular wine, and I found out they did so just to turn around and flip it, I would never sell to that person again. What they did is not illegal, but I have the right as the seller to not do business with them again. The same holds true for SE.


No argument TPE. I would feel the same way if someone I knew flipped a bottle for profit that I sold them at cost. Don't you think that there are different legal thresholds for an individual and a company when it comes to this kind of thing? I'm trying to come up with an analogous comparison in another industry but can't quite come up with one that's similar enough.

It seems that with most allocated wines, the only requirement that I'm aware of to continue to receive the product is continued purchases at certain levels. If someone decides to use their SE to christen ships as opposed to drinking it, would the winery be justified in cutting them off?

PH

Past patronage does in no way guarantee a person right to future goods in perpetuity. Just as there is no contract between SE and the customer that says "you cannot flip wines," there is also no contract that says, "if you have purchased from us in the past, you are guaranteed an allocation in the future." The argument cuts both ways. Even this year, people who had bought Rudius wines previously were shut out because the yields were low.
As a private business owner, I have rights too. If someone I knew who had been a previous customer decided to stand on a public street and legally exercise their First Amendment rights, but their message was incredibly offensive to me and other patrons, I have the right to not receive their business.
SE has that right too... I see no problem with them exercising it.
While I was making a second cup of coffee, TPE posts an analogous comparison..... Red Face

I'm not sure whether the judge would have the option to hear or not hear the case if brought in civil court unless there was a legal basis to classify the claim as frivolous. I'd really like to hear some legal specifics on this from the attorneys on the board. It seems to me that if the only requirement to continue to receive product is continued purchases at certain levels, that there may be an actionable claim that could be made by resellers.

The auto analogy may or may not be comparable here. With many car stores, if they have product whose market value exceeds the MSRP of the vehicle they can (and often do) apply an "additional dealer markup" so that they can sell their vehicles at market value. Once the vehicle leaves their lot, I'm not sure what if any rights they have to restrict sales to resellers in the future, regardless of profit margin.

Typically, with rare vehicles, the buyer pays a substantial partial payment in advance to reserve a vehicle allocation. Unless there is contractual language barring resale, I'm just not sure if there is a legal justification for witholding future products. Let's say a buyer has deposits with a dealership for a 2012 <insert rare vehicle here> and another order for a 2013. The dealership finds out that the buyer flipped his 2012. If there were not contractual restrictions in the sale documents restricting resale and the dealership cancelled the 2013 order based on the logic TPE uses in the Ferarri example, I'm pretty sure the buyer would have a legal basis for a claim.

PH
I also think that there is a very clear difference between restricting allocation based on supply and restricting allocation based on what the consumer does with his or her property after the sale is complete.

Chick-Fil-A has the right to take a position on gay marriage, to publicly state that position and to donate to organizations that support their philosophy. They do not have the right to refuse service to a gay couple, regardless of how offensive the concept is to them.

PH
quote:
Originally posted by wine+art:
I have never understood why it is illegal to sell sports tickets above face value at the sporting event, but you buy from an online broker and pay 3-4 times and it is legel.

You will get busted at major sporting events in Texas. Roll Eyes


I'm thinking there are a couple reasons, w+a. In the case of scalpers, there are usually laws in place that govern this activity. I know in the DC area, one of the restrictions is proximity to the venue. Agree or disagree, there are laws that cover the behaviour. Another reason might be that the online sellers are required to pay tax on the transaction while the "independents" are circumventing tax laws? Just a guess.

PH
quote:
Originally posted by PurpleHaze:
I also think that there is a very clear difference between restricting allocation based on supply and restricting allocation based on what the consumer does with his or her property after the sale is complete.

Chick-Fil-A has the right to take a position on gay marriage, to publicly state that position and to donate to organizations that support their philosophy. They do not have the right to refuse service to a gay couple, regardless of how offensive the concept is to them.

PH

That is 100% true, but that is a form of legally protected discrimination.
Would anyone have a problem with SE removing a member who had bought wines in the past, and then videotaped themselves smashing the bottles with a sledgehammer and poating themup on YouTube to protest the escalating prices of Napa "cult" cabs? SE simply says we want our wine to go to those who really want it, so we removed that person from our mailing list. Well the person who is flipping wine, also does not really want the wine either, so why not remove them from the mailing list?
quote:
Originally posted by PurpleHaze:
quote:
Originally posted by wine+art:
I have never understood why it is illegal to sell sports tickets above face value at the sporting event, but you buy from an online broker and pay 3-4 times and it is legel.

You will get busted at major sporting events in Texas. Roll Eyes


I'm thinking there are a couple reasons, w+a. In the case of scalpers, there are usually laws in place that govern this activity. I know in the DC area, one of the restrictions is proximity to the venue. Agree or disagree, there are laws that cover the behaviour. Another reason might be that the online sellers are required to pay tax on the transaction while the "independents" are circumventing tax laws? Just a guess.

PH


Good points... I thought about the taxes, but you can sell them at face value and no taxes collect.

E-commerce is still far ahead of our current laws.

Hell, look at snail mail, our gov't is clueless and pisses away billions of our taxes on a dying business model. Our current president has refused to address the issue due to his STRONG union ties, and I am not confident the next president will address the issue either, regardless of the outcome in November.

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