Grapes Of Wrath

Outdated laws put the squeeze on small wineries.
3 min read

This story appears in the July 1996 issue of Entrepreneur. Subscribe »

These days, creating a bottle of fine cabernet is the easy part for many small wineries. The hard part? Finding a way to get their wines into consumers' glasses.

The problem, say many, is obscure laws dating back to the Prohibition era that restrict wine and other alcoholic beverages from entering states except through official channels such as private distributors or a government authority. In recent years, a major consolidation of liquor distributors and retail channels has caused the pipeline to consumers to shrink, squeezing small wineries and wine retailers out. Seeing no other choice, some have turned to direct shipping to reach customers.

"Small wineries and retailers see the existing wholesale distribution network as anti-competitive and anti-consumer," says Rich Cartiere, editor of Wine Business Publications in Sonoma, California.

Yet with illegal shipments reaching a record $1 billion last year, says Cartiere, distributors and major wine retailers in several states are pressuring authorities to crack down. That's what happened in a Florida lawsuit filed in U.S. district court recently. Two of the seven small wine retailers named in the suit have already settled out of court. But others, like Ronald Loutherback, owner of three Wine Club premium wine shops throughout California, aren't ready to give up so easily.

Loutherback has established a fund to fight the suit, calling on his many business contacts and sending letters to catalog retailers and small wineries explaining his situation. So far, the response has been overwhelmingly supportive. Says Loutherback, "Most are eager and are coming to me with support." -H.P.

No Reply

Government requests you can ignore

The envelope bears an ominous government logo. Inside you find a letter requesting you to submit your employment interview records for 1987 through 1992 for all left-handed nonminority women between the ages of 27 and 52. . . . Good grief! What will you do?

Possibly nothing, thanks to a little-known provision of the Paperwork Reduction Act of 1995 which states that if a federal agency's information request doesn't include a displayed control number from the Office of Management and Budget (OMB), you can safely toss it in the trash. The only exceptions are compulsory requests such as subpoenas and judicial decrees.

The OMB control number certifies that the government has thoroughly investigated the situation and ascertained the need for the information.

To check on an OMB status, contact the Office of Information and Regulatory Affairs at Room 350, Old Executive Office Bldg., 17th St. and Pennsylvania Ave., Washington, DC 20503. -Cynthia E. Griffin

Eye On The Storm

Making sales . . . weather or not

Neither rain nor snow nor sleet nor hail keeps you from running your business, but they sure put a damper on sales at times, don't they? To prevent your store from overstocking umbrellas during the next heat wave or scheduling outdoor promotional activities during a blizzard, Wayne, Pennsylvania-based Strategic Weather Services offers up to one-year-in-advance weather forecasts covering most of the United States as well as regions in Canada and Europe.

"[The weather] drives the way we live, work and the decisions we make," says Frederic Fox, president of the 6-year-old company, which charges businesses an annual fee of $10,000 to $100,000 for its consulting services. "What we bring to the table is a very reliable picture of what the long-range weather trends are going to be."

How reliable? Strategic Weather Services claims accuracy rates of more than 60 percent and 70 percent, respectively, for precipitation and temperature forecasts. Weather news is delivered via computer, telephone or printed reports. (No word on whether East Coast entrepreneurs need to pay extra for a sunny day.)-Debra Phillips

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