Michael-David Winery Wins Case for Small Wineries
The complexity and absurdity of the three tier distribution system is something that the average consumer rarely thinks about. And rightly so, who cares how it gets to your grocery store or favorite restaurant, right? What matters is that your favorite wines are there ready for you to buy and drink at any moment.
However, the issues of the three tier system have a huge affect on the wineries, and the selection you have as a consumer. A perfect example of this situation playing out was the trial between Michael-David Winery and distributor Frank-Lin Distillers. After five weeks of trial, the jury ruled in favor of Michael-David Winery, which protected wineries rights against distributors.
According to John Hinman of Hinman & Carmichael LLP, Counsel for Michael-David Winery, “Without this decision, California vintners would have found themselves at the mercy of distributors who would, in effect, become entitled to a significant portion of the winery’s brand value and the winery owner’s equity simply because the distributor had delivered the product.”
So what does this mean for you? Unless you work in the wine industry, not much. But it is a step in the right direction, protecting wineries against distributors. Hopefully, victories like these will help put the power back into the hands of the wineries. Thus increasing your selection of wine, and making everyone happy, except for the distributors of course.
Want a wine industry veteran’s take on this trial? Check out Jeff Lefevere of Good Grape here.