Part 4: Response to the Wholesalers' Claim "DTC Shipping Is Full of Counterfeits"
Part 4 in a 5-part series on why nobody trusts wine wholesalers
This is Part 4 of 5 issues of this newsletter that will detail the Wine & Spirit Wholesalers of America’s incompetence and duplicity on the issue of direct shipment of alcohol.
Recently, the Wine & Spirit Wholesalers of America (WSWA) demonstrated why nobody trusts them. WSWA responded to a rational and thoughtful op-ed by Alex Korel on issues surrounding the direct-to-consumer shipping channel published at Wine Industry Advisor. This is a response to WSWA’s hysterical and unsupported claims and an explanation of why producers, retailers, consumers, and even their own members don’t trust a thing they say.
WSWA Says:
DTC SHIPPING IS FULL OF COUNTERFEITS
”The U.S. three-tier system of licensed production, distribution, and retail sales has worked so well that Americans often take it for granted that any alcohol product sold through a licensed retailer – recognized label or not – is safe to consume. In less regulated markets, such as Mexico, it is estimated that 36 percent of all alcohol is illicit. In just a one-month span in 2020, more than 100 Mexicans died from drinking adulterated alcohol and, in early 2020, 154 people in India died from counterfeit alcohol. There are similar problems in the U.K….Within the anonymity of the internet, unlicensed producers or retailers may introduce dangerous products that arrive neatly packaged on the doorstep of consumers. The U.S. Government Accountability Office found that 43 percent of items purchased from retailer websites were counterfeit. While alcohol was not included in this study, alcohol DTC orders are primarily made online, increasing the likelihood that consumers will be sold counterfeit or adulterated product or become victim of a scam. These orders and shipments, which are hidden from effective oversight, increases the difficulty for state and federal regulators to ensure safe and legitimate products for consumers. Where does the liability land?
This is where we see WSWA’s propensity to lie, which is one more reason nobody trusts them.
First, let’s be clear about one thing: Nobody sells counterfeit cheap wine in the U.S. because alcohol can be found already at very affordable prices. More importantly, were any types of counterfeits to enter the marketplace, they would most likely come from wholesalers, who we can see from the above claim are more than willing to lie and operate vast warehouses that are rarely given thorough oversight.
We should note here too the wildly unsubstantiated implication by WSWA that if states didn’t mandate the use of a wholesaler (operate a three-tier system), people would die like they do in Mexico. California and Washington State don’t mandate the use of a wholesaler. Where are the deaths?
Second, where is the “anonymity” behind alcohol sales on the Internet as WSWA claims? There is no anonymity. It is a simple task to confirm that a retailer selling online is who they say they are. In fact, the overwhelming majority of alcohol retailers selling online are brick and mortar retailers with an online presence.
Oh, and that claim that 43% of items purchased online were counterfeit…Well, WSWA is right that none of the items purchased were alcohol. They were coffee mugs, chargers, shoes, and make-up, and all were bought from 3rd party vendors on large e-commerce sites. Leave it to the untrustworthy to cite the most obscure study they can find that has no relationship to alcohol sales.
Finally, there is nothing about online alcohol sales that are “hidden from effective oversight” as WSWA lies about in their statement. Online sales are regulated in exactly the same manner as in-person, brick-and-mortar sales. There is no difference. But if you want to see opaqueness, consider the vast reaches of a wholesaler warehouse where who knows what is being brought into those cavernous buildings. And who knows what goes out, onto their trucks, and into retailer stores. The fact is that, especially with the three-tier system, it is wholesalers rather than retailers online or off-line, that is most likely to be the source of any counterfeit bottlings that find their way into the supply chain.
Claims of counterfeit alcohol linked to direct-to-consumer shipping is a pretext. It is something WSWA likes to claim is a problem when in fact there is no evidence there is a problem. Put another way, it’s another WSWA lie. And it’s another reason why no alcohol producers, retailers, consumers nor even wholesalers trust a thing that is said (or written) by WSWA.
Read Part 1 of this series: “Response to Wholesalers' Claim "Minors Use The Internet to Obtain Alcohol"
Read Part 2 of this Series: “Response to Wholesalers’ Claim “DTC Shippers Don’t Pay Taxes”
Read Part 3 of this series: “States Can’t Regulate DTC Shippers”