Those of us that are alcohol importers take for granted the journey a bottle of wine takes on its way to the consumer. The facts are compelling because of the complex distribution logistics, legal boundaries and quality issues that surround the product.
Some of you may be familiar with my company, Southern Wine Group, LLC. We strive to import the finest wines of Latin America. In order to get our wines to market, we have to overcome many hurdles to service the consumer.
As an example of the challenges encountered, here is the travel itinerary of a wine bottle coming from Argentina to your supermarket shelf.
We’ll assume that the bottle has been ordered and is boxed, ready to depart in the correct US packaging. The label must have been previously approved by the US government, (Tobacco and Trade Bureau, TTB, pre-Sept 11, 2001, called the BATF, Bureau of Alcohol, Tobacco and Firearms).
A sample of the wine is submitted to the Argentine National Viticulture Institute, (INV), for complete analysis. An invoice from the exporting winery is registered with Argentine customs. If the wine is deemed fit for consumption and the exporting paperwork is approved by the national customs authorities, the wine is packed into a shipping container and it begins its long journey north.
The packed shipping container may be a 20-foot dry container, a forty-foot dry container or a refrigerated 20-foot container. After being loaded, it is taken up over the Andes Mountains from Mendoza and crosses west into Chile. The boarder crossing is one of the highest in the world at almost 9,700 feet. Shipping contents are often verified by customs officials here and at the port of San Antonio, which is due west of Santiago, Chile.
If things are well timed, it isn’t too long before the container is loaded aboard a container ship destined to the USA. As owners of the contents of our shipping containers, we must make sure that the wines are shipped in a spot on the container ship that is away from any source of heat. After the wines are loaded onto the ship, the wines are safely in route to the USA.
The wines and the container ship arrive in port. I generally import into Oakland or San Francisco, CA. It is at this point that the commercial invoice for the wines and the bill of lading are presented to Custom, along with the label approvals previously obtained from the TTB. Because of the heightened security measures now in place, Customs generally x-rays the containers. This costs extra to the importer, as does the increased freight prices now experienced because of the higher world-wide fuel prices.
The wines are released from Customs, import taxes are paid and the wine container is attached to a truck to take to the importer’s warehouse.
With luck, the wines have been received into inventory and are ready to sell to a wholesale distributor in a state in the USA.
An order has been placed with the Importer and the wines are released for pickup FOB, (Incoterm, Free On Board) to the distributor. The distributor picks up the wine in a truck that they have hired.
The wine is delivered to the wholesale distributor in the given state. Often wholesale distributors are exclusive to their brands in the state in which they operate. More taxes are paid and the wine is received into the distributor’s inventory.
A commissioned sales agent who works for the distributor takes the wines out to show to a retail establishment or a restaurant. Often the sales agent will uncork the samples to taste with the account. If the meeting is successful, the retail outlet or restaurant will place an order with the wholesale distributor.
The distributor delivers the wine order to the retail account or restaurant and invoices the establishment.
You enter the shop or restaurant and exclaim, “Steward or waiter, this wine seems interesting, please sell me a bottle!” Of all the products imported into the USA, wine goes through the most handling before it reaches the end consumer.
Of all wines, it is imported wine that travels the farthest and is the most costly to bring to the US consumer. Consequently, imported wine sees the most sacrifice from the businesses that sell them so you may enjoy these fine products at a competitive price.Contact www.southernwinegroup.com for more info.
Kirk Ermisch is a professor with the business administration department at COCC. He can be reached for comment at email@example.com.