Are Distributors Against Small Liquor?

ust recently a nationwide class action lawsuit was filed against Southern Glazer’s Wine & Spirits, a distributor. Now you may be thinking, “so what?  What does this have to do with me?” Well in a roundabout way it has to do with anyone who likes to frequent small, privately owned liquor stores across the United States. While there are many parts to the lawsuit; two stand out to me the most. Here are the summarized items in the suit that I am referring to:“refusing to sell products to class members without them purchasing “tie-ins” (other types of liquor than those the customer wishes to purchase),” and “threatening to cut off supplies to customers who do not buy a sufficient quantity of liquor, or liquor of select varieties.”

Some people might not have any problem with making companies buy certain items to have access to other items. But let’s take a step back from this and analyze what is happening to the mom & pop shops we all love, the owners we make friends with in the hopes of acquiring a great bottle. Liquor distributors are telling small shops they need to buy X number of cases of a wine or spirit to get in an allocated product. A small shop might not be able to purchase or sell X many cases; so its customers lose out on the access to the allocated product. Across the street, the bigger chain store (who has not carried the allocated product in the past) is told the same thing and says, “sure we will purchase X number of cases plus some” and are given a deal on the wine or spirit.  The chain store, in turn, sells off the bulk liquor at crazy low prices to get it out of the store, and now has allocated product for their customers.

The problem with this is that the distributors are killing the small guy and dictating to you, the consumer, where you will have to go to purchase your liquor. Most of the time these larger stores, while giving deals on some bottles, will end up charging more for the allocated ones, causing a lose lose situation for you the consumer.   You are forced to buy liquor at the bigger chain store, at a higher price than you would have gotten from the private owner you have established a relationship with.

Don’t get me wrong; I love going into a big warehouse store and finding amazing deals on some great bourbon because of their massive buying power. But where does this stop when it comes to the small shop? Do we want to see the privately owned shops go away and only to have chain liquor stores left? I for one don’t. I love the comradery and personalized experience when I go into small, local stores. After all, as Matt Self said in his article, Bourbon Hunters Guide, “it is all about building relationships.” Relationships are not built at big box stores or chains; they are built in the small shops we currently all know and love.

While most likely nothing will change, I still sit here and wonder, “if equal allocations were shipped out everywhere would we have this problem?”  Years ago relationships and respect paved the way for business. Today, it is just sales numbers and the power of the almighty dollar.  You will never hear me say capitalism is bad, but at the end of the day I will always say, “respecting the one who has treated you well the longest is the most important.”  The shop who has been selling your products for over 20 years, even when they were not the top sellers, is the one who should be taken care of; not the store that is selling what is hot today to dump you tomorrow for the next big thing.  I hope that the small private stores will still be able to procure the allocated and specialty bottles; and that they will not be forced out by their larger chain competitors with more buying power with the distributors.