This scheme has been going on for ages. I ran across it all the time, when I was in the wine trade. I wouldn’t play in that sandbox. The folks who were looking to extract extra dough from the companies I worked for were usually short timers, on their way to another con or grift. They worked in the shadows, often away from ownership. That way the owners could have plausible deniability. But they all knew about the game plan. Slotting fees. Pay to play, there are all kinds of names for it. Nowadays, it has become more of an out-in-the-open gambit. It’s come out of the shadows. And because of the over consolidation of suppliers, mainly large liquor cartels, there is competition within the large distribution mechanism between those liquor giants to procure as much shareholder value as they can get, even if it means bending the law. In the ensuing cage fight, the artfully crafted, small-batch fine wine producers are scuttled. One, because they are not part of the liquor lobby’s concern and two, because they have no seat at the table. They can’t pay to play, nor would most of them if they could. They have higher aims, and one of them isn’t to buy the business. So, that leaves them out in the cold, especially if you’re a small winery represented by a small-to-medium distributor.
A shame too, because a well-run beverage program can augment a good kitchen. But once one goes down that road, the wine list becomes collateral damage. It becomes more about real estate and less about wine. To the highest bidder goes the spoils.
Years ago, I saw this starting to happen more. As everything was being consolidated into the hands of two or three large players, it became less about finesse and more about power. Salesmanship went out the window. It wasn’t good enough to grab a bag of wine and a proposal and go taste. The buyer became conditioned to getting perked and pampered. It became less about the guest at the table and more about the conduit and how to secure the loyalty of the gatekeeper. It became a transactional relationship, not one built on trust and working toward the goal of being the best. And the gatekeepers got real savvy to just how much the bagmen (and women) could offer them, on the side. How did that wine buyer for a small chain of restaurants afford to “buy” a $100,000+ sports car on his salary, with a wife and kids to support? Or what about that Rolex Submariner on his wrist, a $15,000 hard-to-get watch? It’s not like the gatekeeper was banking his extra curricular bonus bucks in a college fund for his daughter and son. No, it was displayed all out in the open, for everyone to see. It had a billboard effect. “You want my business? This is how I roll, in a Maserati GranTurismo wearing a no-date Sub. Whatchu got for me?”
Example: Let’s say a restaurant was pouring a red wine from Central Italy. It was very successful. So much, that the product manager had to up the order of the wine from the winery to make sure they didn’t run out.
After about nine months, they were really clipping with that wine. And then one day, someone noticed the account wasn’t buying it anymore. They asked the salesperson, who hadn’t paid attention to the lack of sales. That person had no idea. They weren’t on commission, so it didn’t matter. So, the manager did a deep dive and tried to figure out what had happened. Was there something wrong with the wine? Did people not like it? Was it priced wrong?
None of the above. So, said manager prepared a report to take to the owner. The bottom line to the report was that with that one wine alone, in nine months, that wine had made the account over $30,000 in gross earnings! He told the owner, in person, “It’s not broken, I know you have a lot of things to look after.” The manager had been looking after his business in this area and it looked to him like this was a solution looking for a problem, that someone had inserted their will into the process.
Sure enough, the wine buyer told his owner that he was bored with the wine and wanted to move on. Oops.
What really happened here? Did some big distributor or importer wave cash in his face? Did they wine him and dine him at some fancy “gentlemen’s” club, complete with “dessert de jour?” Did they arrange for an all expenses paid trip to Italy for him and an accompanying partner (maybe his wife? Or…?). Or did the buyer just figure out, all on his own, that he had a nice little piece of real estate and the cost per square foot just went up?
That’s an occurrence that I wish I could tell you was pulled from the abstract. But it wasn’t. It happened. That short timer is now selling tacos and tequila in some non-descript suburban bedroom community. So much for that one’s delusions of grandeur.
What gets lost in all of this is the guest. Not the buyer, not the distributor, not the winery — the person who sat down three months ago, ordered that Central Italian red, thought I need to remember this wine, and came back to find it gone. Replaced by something with a fancier label and a worse story. They’ll assume the restaurant made a considered choice. They won’t know about the lap dance.
The winery loses too, quietly. A market disappears without explanation. No complaint, no review, no feedback — just silence where the orders used to be. A small producer in Abruzzo or Umbria doesn’t have the bandwidth to investigate. They move on, or they don’t.
The federal government has taken notice, at least partly. There have been investigations, and in some cases legal action, aimed at distributors who crossed the line from aggressive salesmanship into outright bribery. The three-tier system was supposed to prevent exactly this kind of capture — producer, distributor, retailer kept at arm’s length from each other, in theory. In practice, the arm got shorter every year consolidation tightened the market.
But the investigations have tended to land on the middle and the bottom. The distributor. The buyer. The bagman who got too comfortable. The large multinational liquor companies that sit above all of this — the ones whose brands (and margins) are the reason the bagmen exist in the first place — they remain largely untouched. They have legal teams designed for exactly this kind of fog. Layers of distance between the directive and the transaction. Plausible deniability, institutionalized.
So you watch. You keep a watchful eye on a system that has proven remarkably good at protecting itself. The small producers stay out in the cold. The interesting wines migrate to lists where someone still cares, or they don’t migrate at all. The guest gets a wine list that looks curated and reads like a ledger.
The three-tier system was built on a certain idea of accountability. What we have now is a three-tier system of accountability too — just running in the opposite direction. The money goes up. The consequences come down. And somewhere in the middle, some chooch in a Maserati is already on to his next grift.
© written and photo-synthesized by Alfonso Cevola limited rights reserved On the Wine Trail in Italy
