Wine.com outrage

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Originally posted by jfoobar:
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Originally posted by KSC02:
Board-O can be described with several nouns, but 'naive' is not one of them.

You are correct. Naive is not one of them. It is an adjective.
Razz

Actually, correct you are. Thanks for the correction. Red Face Smile

Now, please dip into the hat and pull out a correct ADJECTIVE Big Grin
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All you need to know about this is that wine.com is not a member of SWRA, and when asked to join said no. They do not want the stupid laws changed, they like it how it is. There are those on the side of the consumer, and there are the enemies. Wine.com is clearly in the later group, along with the distributors. Never buy from them and tell everyone you know not to. The fight to have sane wine shipping laws has taken a massive hit by their actions, and I can only pray that the bad publicity they are receiving severly impacts those scumbag's bottom line.


Well said VT2IT!

Chilepepper, my 'beef' with wine.com is that although this tactic is perfectly legal, I think it's ruthless, immature, and lacks integrity. It's akin to Tonya Harding legally busting the kneecaps of Nancy Kerrigan - destroy the competition rather than honestly compete with it.

In the end, wine.com's actions will do more harm than good for their reputation as a corporate citizen and for me as a consumer. I wish them the same fate as Pets.com.

wine.com will continue to suck dirty, fetid *ss...
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Originally posted by GreenDrazi:
JavaMonkey is right - stupid analogy (no surprise there).


If you can't see that both are going after lawbreakers, then you are beyond help!

One just happens to be a law many here don't agree with, including myself. I'm just not going to criticize a business for being concerned and taking actions against "illegal" competition.
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Originally posted by Festiva:


Chilepepper, my 'beef' with wine.com is that although this tactic is perfectly legal, I think it's ruthless, immature, and lacks integrity. I wouldn't do anything like that to the companies I compete with. In the end, wine.com's actions will do more harm than good for their reputation as a corporate citizen and for me as a consumer.

wine.com will continue to suck dirty, fetid *ss...


So, if your competition was breaking the law to reach your customers, who in turn didn't purchase from you, you would merely turn the other cheek?
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Originally posted by Chilepepper:
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Originally posted by JavaMonkey:
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Originally posted by Chilepepper:
Would you be outraged if Microsoft went after little guys that were selling counterfeited copies of Office shipped in from China?

There are lots of issues here, but that's a bad example. Microsoft is protecting themselves from people who are selling Microsoft's property without buying that property from Microsoft. That's not the case here. Wine.com is just going after competitors.


Yes, competitors that are breaking various state laws that wine.com has spent tremendous amounts of money to ensure they comply with.

Again, I'm just saying from a business perspective, what they are doing is right. They aren't bad for the consumer, the structure in which they are forced to operate is (i.e. state by state 3-tier systems)

You're confusing two separate issues. Yes, what their competitors are doing is LEGALLY wrong. I'm not disputing that.

What wine.com is doing is MORALLY wrong, and it IS bad for consumers. Yes, the ridiculous laws are bad for consumers, but some retailers are actually trying to help their customers, at their own risk. Wine.com is trying to prevent those retailers from helping the consumer. And in the end they are taking action that limits the options of consumers in order to protect their own income. That is BAD for consumers. Is it legal, yes. Is it moral? No.
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Originally posted by Board-O:
Criticizing them is hypocritical if you claim to be law-abiding.

Not at all. I can be completely law-abiding, that doesn't mean I have to snitch out those that aren't. Choosing to conform to the law and choosing to take action against others are two different things, and doing the first doesn't imply that you have to do the second.
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Originally posted by JavaMonkey:
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Originally posted by Board-O:
Criticizing them is hypocritical if you claim to be law-abiding.

Not at all. I can be completely law-abiding, that doesn't mean I have to snitch out those that aren't. Choosing to conform to the law and choosing to take action against others are two different things, and doing the first doesn't imply that you have to do the second.


You are blinded by the fact that you don't agree with these particular sets of laws. I don't think you'd have a problem with people/businesses taking action to report those breaking laws that you do agree with. I could state examples, but they are more serious crimes than illegally shipping alcohol and would cloud the subject further.
Well, here's an opinion from a distributor salesman, if you care:
Board-O is 100% CORRECT!
They are working within the laws of the community in which they reside and transact business.... If you do not like the law... get it changed.
Festiva---"Tonya Harding legally busting the kneecaps of Nancy Kerrigan" That's rediculous!

P.S. If I find there are any sales-people that I compete with that are "deucing" the retailer (under the table pay-offs for getting orders), I will be the FIRST to inform the ABC!
And did I say that I was a VP and Exec Board member of the representing Salesman's UNION? Wink
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Originally posted by Chilepepper:
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Originally posted by JavaMonkey:
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Originally posted by Board-O:
Criticizing them is hypocritical if you claim to be law-abiding.

Not at all. I can be completely law-abiding, that doesn't mean I have to snitch out those that aren't. Choosing to conform to the law and choosing to take action against others are two different things, and doing the first doesn't imply that you have to do the second.


You are blinded by the fact that you don't agree with these particular sets of laws. I don't think you'd have a problem with people/businesses taking action to report those breaking laws that you do agree with. I could state examples, but they are more serious crimes than illegally shipping alcohol and would cloud the subject further.

It has nothing to do with the fact that I disagree with the laws. I agree with the speed limit law, that doesn't mean I think I should report everyone who exceeds the speed limit.
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Originally posted by JavaMonkey:
It has nothing to do with the fact that I disagree with the laws. I agree with the speed limit law, that doesn't mean I think I should report everyone who exceeds the speed limit.


As I pointed out over on Vinography, this is a poor analogy. Speeding endangers others, shipping wine to consumers does not. Smile

The part of me that disagrees with wine.com's practices has everything to do with my disagreement with the laws. I see no shame whatsoever in admitting that.

The more pragmatic side of me agrees with chilepepper. However, that same side of me thinks that wine.com was inviting PR disaster by doing this and that is what they are getting. They probably deserve it.
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You're sounding very New Hampshire(ish) there VT2IT


Hey! I resemble that remark. Big Grin

Everything they are doing is by the books, why should they allow illegal competition to continue hurting their business. Businesses are not around to make things easier and cheaper for the consumer. They exist to make a profit, if they don't they will not be around very long. They owe it to their investors and stockholders (assuming they have some, I don't know a lot about the company profile) to do what they can to maximize profits. If you invested in the company wouldn't you want them to do everything legally possible to get a step ahead of their competition and give you the best return on your investment possible. If people decide to take their money and invest it elsewhere in more profitable businesses they're up the creek without the paddle needed to survive, especially if internet wine business profit margins are as thin as has been stated in previous posts.
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Originally posted by JavaMonkey:
What wine.com is doing is MORALLY wrong, and it IS bad for consumers. Yes, the ridiculous laws are bad for consumers, but some retailers are actually trying to help their customers, at their own risk. Wine.com is trying to prevent those retailers from helping the consumer. And in the end they are taking action that limits the options of consumers in order to protect their own income. That is BAD for consumers. Is it legal, yes. Is it moral? No.


Exactly!! Wine.com will never get any business from me.
Okay folks. Here is the gist of the problem as I see it. Quoted directly from Rick Bergstrund:

SO...we think it's time for answers on this topic by the state regulators to either:
1) enforce their laws uniformly and fairly OR
2) open up to interstate shipping

We're ok with either outcome, though the second would be the best for the health of the online wine market.


I actually sympathize with the conundrum facing Mr. Bergstrund. What I don't sympathize with is his approach to the conundrum. Apparently, he sees this as an either/or approach - rat out your competitors to create a level playing field, or contribute financially to the Specialty Wine Retailers Association thereby affecting a change in the law that will create a level playing field and that will in turn result in a benefit to all consumers.

He had the option to choose B, which he actually admits would be the best option, but ignored it and chose option A, in a particularly repugnant way, as his method of recourse.

This is hypocrisy of such monumental proportions as to require another word in the English language in order to describe it.
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This is hypocrisy of such monumental proportions as to require another word in the English language in order to describe it.


This is laughable. Of course they'd prefer open shipping. It would make things easier on them. Remember, they do it the legal way, which means a physical location or license in multiple states. If the laws change, they could consolidate and run their business similar to Amazon.com. Shy of that, they do want to ensure they aren't getting undercut by those cheating the system. Nothing hypocritical about that.

They don't have the resources to change the system and its a bad return on investment to try. If you care about P&L, you do what they did.
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Originally posted by Chilepepper:
They don't have the resources to change the system and its a bad return on investment to try. If you care about P&L, you do what they did.

Sure, no argument that they're 'supposedly' doing business the 'legal' way, and they're possibly losing some sales to other guys shortcutting the system.

BUT, performing 'sting operations' is your agreed upon 'best' course of action to address the competition issue? Come on Chile, you don't REALLY believe that do you? Roll Eyes
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Originally posted by KSC02:
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Originally posted by Chilepepper:
They don't have the resources to change the system and its a bad return on investment to try. If you care about P&L, you do what they did.

Sure, no argument that they're 'supposedly' doing business the 'legal' way, and they're possibly losing some sales to other guys shortcutting the system.

BUT, performing 'sting operations' is your agreed upon 'best' course of action to address the competition issue? Come on Chile, you don't REALLY believe that do you? Roll Eyes


How else to prove it? Your preaching to the choir to say the laws are stupid. Sometimes the only way to catch lawbreakers is a "sting" operation. Its done on many other serious crimes. I just can't reprimand them for doing it related to wine shipping.

Just so you know, I'd love to see open shipping. It sucks that places like winebid and HDH won't ship to Florida. Heck, we have no law against it; it was thrown out with direct shipping from wineries since it was part of the same law. Some retailers ship to Florida since the law doesn't prohibit it, others refuse since there is no law to allow it either.
What, you're surprised he would advocate breaking the law? An attorney? Why, it's good for business. Big Grin

I see the thread over there is now locked. He mentions some "over the top" posts. I did not see them, but I assume they were posts that did not agree with him, non? By definition, it would be par for the course.

THIII
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Originally posted by Board-O:
And this is wrong because...


Let's see.

They actively set up others to be prosecuted under laws that, by their own admission, they believe to be wrong. Why? To make more money.

Does that sound like a righteous act to you? Hell, you can't even claim that it was an economically expedient act since they will almost certainly lose most, if not all, of the competitive advantage they might have otherwise gained thanks to this PR mess and the longterm tarnishing of their company's image in the eyes of thousands of customer and potential customers.
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Originally posted by jfoobar:

Let's see.

They actively set up others to be prosecuted under laws that, by their own admission, they believe to be wrong. Why? To make more money.

Does that sound like a righteous act to you? Hell, you can't even claim that it was an economically expedient act since they will almost certainly lose most, if not all, of the competitive advantage they might have otherwise gained thanks to this PR mess and the longterm tarnishing of their company's image in the eyes of thousands of customer and potential customers.


And the other retailers violate the law. Why? To make more money. Does that sound like a righteous act?
It has been my experience in this business (over 25 years) that the government, at any level, does not need a complaint to run sting operations. They do it all the time when they feel it can generate a dollar windfall. Roll Eyes

And the THREAT of the sting is what keeps everyone law abiding.
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Originally posted by Board-O:
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They didn't just report the violators to the authorities - they set out to entrap them.


And this is wrong because...


I find it morally wrong, just my opinion. They crossed a line when they went out and ordered wine from their competitors for the purpose of luring them to break the shipping laws.
quote:
Originally posted by Pterostyrax:
Okay folks. Here is the gist of the problem as I see it. Quoted directly from Rick Bergstrund:

SO...we think it's time for answers on this topic by the state regulators to either:
1) enforce their laws uniformly and fairly OR
2) open up to interstate shipping

We're ok with either outcome, though the second would be the best for the health of the online wine market.


I actually sympathize with the conundrum facing Mr. Bergstrund. What I don't sympathize with is his approach to the conundrum. Apparently, he sees this as an either/or approach - rat out your competitors to create a level playing field, or contribute financially to the Specialty Wine Retailers Association thereby affecting a change in the law that will create a level playing field and that will in turn result in a benefit to all consumers.

He had the option to choose B, which he actually admits would be the best option, but ignored it and chose option A, in a particularly repugnant way, as his method of recourse.

This is hypocrisy of such monumental proportions as to require another word in the English language in order to describe it.


It should be noted that Wine.com was invited to and asked to join with other retailers in the Specialty Wine Retailers Association. SWRA is the only organization litigating and lobbying to open up Direct To Consumer shipping by retailers.

To-date, Wine.com is not a member.

Tom Wark
Specialty Wine Retailers Association
http://www.specialtywineretailers.org
On another note, one hopes that when Specialty Wine Retailers Association is successful in changing the laws to allow retailer to consumer shipments that Wine.Com will thank their fellow retailers who supported the effort with their hard earned money for providing the conditions for making their business more profitable.

Tom Wark
Specialty Wine Retailers Association
http://www.specialtywineretailers.org
quote:
Originally posted by Spenser:
And the other retailers violate the law. Why? To make more money. Does that sound like a righteous act?


Exactly what I was thinking. You guys are acting like these other retailers were breaking the law out of the goodness of their heart. Give me a break; they are trying to make MONEY just like Wine.com!!
Despite the negative PR for Wine.com, we can see there’s a lot of energy on this issue. Maybe there’s a way to channel it into some positive change.

Wine.com has taken a lot of criticism over the last few days, some of it very personal and unprofessional, and most from anonymous sources who do not disclose their full name or the companies they represent. Remember that behind Wine.com is a team of good people who are passionate about wine and how the Internet can help people enjoy it. The Wine.com team spends incredible time and energy trying to better understand our customers and how we can serve them. That is the foundation of our business strategy. Our strategy has never counted on state shipping laws changing, because while that would be nice if it happened, it is not something on which we can depend.

Also, remember that there are two sides to every story, so here is ours. Wine.com wants two things:

First and foremost, open markets. We’d like to see all states open up to interstate shipping of wine. This would be best for consumers, best for the health of the online wine business and best for Wine.com and our customers. As an example, Virginia recently did this, and we applied for and received a direct shipper’s license from the state and immediately closed our Virginia warehouse. We now serve Virginia customers from our Florida warehouse, which offers a better product selection and lower prices than we were able to offer from within Virginia. We collect and pay sales tax to the state of Virginia. We’d like to see other states follow suit, but are concerned with the developments in Illinois and Texas, which appear to be headed the opposite direction. (People often confuse wineries with retailers when discussing state shipping laws – we’re focusing here just on the issues pertaining to retailers).

Second, we want fair competition. How would you feel if the government required you to spend millions of dollars every year to comply with its laws, while letting your competitors play for free? Whether markets are open or closed, we believe all retailers should be playing by the same rules. It is not right for states to selectively enforce their laws, causing increased cost and complexity to some while others fly under the radar. It is also not good for our customers, as the costs of compliance and collecting and paying state sales tax makes us uncompetitive in many states. As an example, in 1999 Washington notified Wine.com (then operating as eVineyard), that it must stop selling and shipping to Washington consumers from outside Washington. Wine.com ceased selling to Washington consumers, then opened up a warehouse in Washington and applied for and received a retail license to sell wine in Washington. We buy from Washington wholesalers, collect and pay Washington sales tax and service Washington customers in this way. We have patiently waited for eight years for the state to either open up to out-of-state shipping or enforce their laws with other retailers, but nothing has happened. With the exception of a handful of reputable retailers, nearly all others ship into Washington without a license, local store or sales tax. This is not fair, and puts our customers and stakeholders at a disadvantage.

Today, Wine.com finds itself with neither open markets nor fair competition – most states are both closed to outside shipping and unfair in their enforcement of the laws on their books. After nearly a decade of waiting for and asking states to either open up or fairly enforce their laws, incurring literally millions in extra costs not incurred by our competitors, we’re ready for change. The status quo is no longer an option. So what can we do?

One option is to play by the same rules as most other online retailers – ship illegally and don’t charge sales tax. We don’t like the state laws and they’re rarely enforced, so let’s ignore them, close all our local distribution centers, ship from a central location to a larger number of states and not charge sales tax. Selling to more markets, and at lower prices without sales tax, we’d instantly grow our revenues. And without all the local warehouses and the complexity of running separate inventory and websites for each state, our costs would decrease and our profitability would improve. Believe me, there are days when this looks like a pretty good option. But we haven’t gone there, because if wine is going to be a viable and legitimate online category and grow and thrive in the long run, we think it’s got to be done the right way. This means operating within the law to serve our customers, while working to change the laws with which we all seem to disagree.

Some have suggested we join lobbying efforts by other retailers, specifically the Specialty Wine Retailers Association. While we encourage those efforts and don’t begrudge people donating to that cause, we believe it’s fundamentally flawed to lobby for changing laws you are currently breaking. We don’t buy the argument that it’s okay to ignore the laws just because they’re outdated, not consumer-friendly and difficult/costly to implement. If we throw our hat in that ring, we lose the opportunity, as a licensed, tax paying retailer in a given state, to have a meaningful and productive dialog with that state. We will join the SWRA the minute they establish a code of conduct that requires its members to operate within the law. Only then can that organization gain the credibility it needs to make a difference.

Others have suggested we launch our own lobbying efforts, and that is the path we have chosen. We have approached several states, in which we have legal standing, and asked regulators to consider our situation. We have described our operating model and costs of compliance with their laws, and we have pointed out that we are one of a small number of companies who comply with those laws. The only way to base this argument on facts was to place orders from other online retailers who are actively and publicly soliciting customers in other states (see Google), in order to confirm they do in fact ship to those states. We did not single out or target any particular retailers, because the list of illegal shippers is large. (We need to correct a mistake in an earlier article from Wine Market Report, who stated erroneously that BevMo! ships illegally. That is not our belief – in fact they appear to be one of the few companies who, like Wine.com, are working within the law). We also did not approach states anonymously, but made it clear who we are and why we feel the need to take action, even if that means some negative PR or response from others with a vested interest in the status quo. We have asked the states to either: 1) open up to out-of-state shippers, so we too can do business without the costs of compliance, or at the very least 2) fairly and consistently enforce the laws they currently have. We have made it clear that we’ll accept either outcome. The only thing we can’t accept any longer is the status quo -- closed markets and unfair enforcement.

We can’t predict whether a state will take action or which course they’ll follow. Some appear to be interested in opening up, others in fairly enforcing their current laws. While we understand our actions will not be popular with folks who are benefiting from the current state of affairs, we owe it to our customers and shareholders to take a more proactive approach than we have in years past. We are willing to take risks to challenge the status quo, including negative PR. But we also suspect a lot of consumers may be unaware they are currently buying from companies who ship illegally, and when they find out, they may prefer to buy from someone who is compliant with state laws. For example, many of our customers are corporate gift givers, and we think they deserve to have a legal way to purchase wine gifts for their clients.

Wine.com has been accused of and called a lot of things over the last couple days. That can be expected from those who currently benefit from illegal shipping. But if you’re going to criticize us so vehemently, at least have the courage to disclose your full name and the company you represent, rather than hiding in anonymity and throwing in grenades from the sidelines.

We don’t expect everyone to rally around the cause of fair enforcement of the current state shipping laws. But we should be on the same side with regard to opening up more states to out-of-state retailers, so take some of the energy we’ve seen over the last couple days and focus it on your state regulators.

Rich Bergsund
CEO, Wine.com

Mike Osborn
Founder, Wine.com
quote:
Originally posted by wine dot com:
Second, we want fair competition. How would you feel if the government required you to spend millions of dollars every year to comply with its laws, while letting your competitors play for free?


Good luck, Rich and Mike. I see nothing wrong at all with protecting your business interests from others' illegal actions.
I'm sure many of the posters that support wine.com's actions would also have been in favour of slave.com blowing the whistle on those running the underground railroad. They were breaking the law, weren't they? Well then it would have been fine to entrap/report/punish them accordingly...right? Vastly different laws of course, but the concept of violating a law that many consider to be unjust/corrupt, vs. reporting those that violate such a law are pretty much the same.

The laws are (for the most part) in place for one reason - because powerful lobby groups with lots of money want to prevent competition. They want to do this so that they can make more money than they would otherwise be able to within their own states. Like all protectionism, a very small number of parties (retailers...and politicians that receive large contributions, or a bunch of free wine/booze) are benefited, to the detriment of a very large number of parties (consumers)...and for the point of this argument I am ignoring that some wine retailers may be public companys with many shareholders that benefit from this type of action. Unethical lobbyists throw money at unethical politicians, laws get passed, consumers are hurt. Of course, I am sure that some wacko religious jurisdictions have their own reasons for passing similar legislation, but I assume that protectionism is the main reason behind the vast majority of such legislation.

From what many have said, wine.com does not have competitive prices. However, by reducing competition, average prices across the country will presumably increase, will they not? If so, won't wine.com's prices all of a sudden be more competitive? Will they (and a lot other retailers, except those that suddenly lose a large part of their customer base because of shipping laws) make more money? And where will this money come from, will it not come from the pockets of consumers? Wine.com might argue that they have spent money to get the infrastructure in place in compliance with the new laws, and their actions justify their reporting of violators and other actions...or maybe they were part of the lobby groups that pushed for the legislation (or, once their infrastructure was in place, did not join in any efforts to have the legislation overturned...after all, if they were set up to comply with the law, and if the law increased prices and made them more competitive, why would they want to get the laws overturned, that would just make prices more competitive and lower their revenues). I am probably wrong on this of course, I am sure that wine.com is at the forefront of participating in the industry groups that are seeking to have such laws overturned.

Wine.com is not doing anything illegal by reporting violators, just as slave traders/owners would not have been doing anything illegal by reporting those that were operating the underground railroad. Many people disagreed with the laws regarding both of these topics (obviously some or many do not disagree with those laws). It is also not illegal to express disapproval over wine.com's actions, or to publicly voice such an opinion (in a non-libelous/non-defamatory manner of course...and some appear to have crossed this line I think), or to say they will not buy from wine.com. Many people here seem to be taking the approach that because a law is in place, that law must be followed...or at least that that law should not be violated, or that there is nothing wrong with reporting the violators of the law (and it seems pretty clear that those that make this point do so while ignoring whether or not the law is a just law...and that is fine, as long as they would be willing to apply that approach to similar discussions regarding any other laws, i.e. my slavery example). Seems to me that speaking up about what is considered to be unjust (or refusing to follow laws considered to be unjust) helped make your country what is is today. What would your country be like if your forefathers thought like you did? Think about that while you have a cup of tea and curtsy to the queen.

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