Part 5: Response to the Wholesalers' Claim "DTC Shipping Is A Job Killer"
Part 5 of a 5-part series on why NOBODY Trusts the WSWA
This is Part 5 of a 5-part series of this newsletter that examines the kind of nonsense and hysterical claims made by the Wine & Spirit Wholesalers of America that lead nobody to trust them.
Recently the Wine & Spirit Wholesalers of America attempted to discredit a very reasonable and sober look at the direct-to-consumer alcohol shipping channel carried out by ShipCompliant’s Alex Koral for Wine Industry Advisor. This was not their first attempt to make the case that DTC sales and shipments are dangerous. But it was the most comprehensive example of why NOBODY trusts a thing WSWA says on this issue—not alcohol producers, not retailers, not consumers, and not even their wholesaler members.
WSWA Says:
DTC SHIPPING IS A JOB KILLER"
In a study undertaken by the Wine & Spirits Wholesalers of California, it was estimated that recently-introduced legislation aimed at expanding DTC shipping privileges to distilleries could eliminate up to 5,000 jobs. Similar studies in Vermont and Maine undertaken by WSWA found up to 42 and 98-full time jobs were at risk, respectively paying $1.5 million and $3.3 million in wages and lowering the states’ economies by $5.9 million and $12.4 million. Should DTC licensing privileges expand as Koral suggests, orders will most likely be mainly fulfilled by larger producers that can “manage complex regulatory schema and handle the expensive and labor-intensive shipping process” and dominate the e-commerce space by out-buying search returns and digital ad space, just as Home Depot edged out mom and pop hardware stores and Amazon edged out independent book shops.
The claim that DTC shipments by producers will kill jobs has been bandied about for decades. To date, no one has been able to offer any evidence that allowing producers to ship products directly to consumers causes job losses. Moreover, it’s important to note in the context of this article that WSWA does not claim that in the 30+ years producers of alcohol have been shipping directly to consumers has it caused any job losses.
Here they claim that if distillers are granted shipping privileges through a system of regulation similar to what wineries operate under, it “could eliminate up to 5,000 jobs.” This number is created out of thin air. They do offer a link to substantiate their claim. If you follow this link you will find there is no “study” at all claiming that 5,000 jobs will be lost if distillers are given the privilege to ship spirits to Californians. All you find is a whimsical series of claims made by the Wine & Spirit Wholesalers of California who oppose the proposal. The claims are backed up by nothing. This helps explain why NOBODY TRUSTS the WSWA.
The irony is that in writing in response to Mr. Koral’s article in Wine Industry Advisors WSWA does not mention data pointed to by Koral that dispels the claim that DTC shipments cause job losses. Koral makes this point when he notes that “Data from the U.S. Bureau of Labor Statistics shows that since 2005 (when Granholm v. Heald allowed the wine DtC market to flourish) New York wholesalers had a 53% increase in jobs. Retailers added more than 3,600 jobs for an increase of 38%.”
To this fact you can add a study done by the Maryland Comptroller that looked at the impact of DTC wine shipping one year after it was implemented in that state. The Comptroller’s study shows that in the year DTC shipping went into effect, state wholesaler revenues increased 3.6%.
But there is something else here that should cause anyone considering working with or supporting WSWA and especially working with their communications department that wrote the above, to slowly walk away but not turn their back on them. It is the claim that if distillers are allowed to ship spirits to Californians, “orders will most likely be mainly fulfilled by larger producers.”
In a study of direct to consumer wine shipments during the year 2021 conducted by SOVOS-ShipCompliant, it was found that just under 60% of all wine shipped was from wineries that produced 5,000 cases of wine or less. In fact, this phenomenon of the smallest producers dominating the DTC space has always been the case from as long as wine shipments have been measured. This begs the question, what would possess WSWA to suggest that spirit shipments, which are advocated for primarily by small distillers, would be any different? We don’t know the answer because WSWA offers no explanation for this wildly inaccurate and illogical claim.
If you’ve read through this 5-part series addressing WSWA’s opposition to direct-to-consumer shipping, certain things should be clear at this point:
WSWA ALWAYS manipulates data or ignores data when making its case.
WSWA’s arguments are highly IRRATIONAL and HYSTERICAL
WSWA will LIE in attempting to make their case
NOBODY TRUSTS ANYTHING WSWA SAYS OR WRITES.
Why does this matter? After all, WSWA consists of a small number of middlemen distributors, none of whom have ever been in the business of shipping wine to consumers, let alone selling it to consumers.
It matters because even in 2022, after decades of the WSWA outright lying, offering hysterical and incorrect statements on this matter, some in the industry still think these folks matter. More importantly, their publicly subsidized profits allow them to contribute millions of dollars to campaigns, which grants them unearned access to those lawmakers. And it’s in those settings where they continue to make their hysterical claims to people who have literally been paid to embrace those claims.
Setting the record straight and reminding folks that NOBODY TRUSTS THE WSWA remains an important task.
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”
Read Part 4 of this series: “DTC Shipping is a Job Killer”
I so dislike the argument that something has to be done or a job (or series of jobs) will be eliminated going forward. If that argument held any water we would still be making buggy whips, or the jobs would be lost (100+ years later)!