Captain Lamberth and Tennessee’s Ship of Fools
Tennessee State Representative William Lamberth, provided testimony on why wine shipped from fulfillment houses should be made illegal in Tennessee.
Here is the direct excerpt from his testimony:
“Large fulfillment centers have someone’s complete customer list, handles all their marketing and distribution, they have the complete ability to destroy that small business at any second, that they want by cutting them off.
They got their entire customer list, shipping their product, they can ship what was requested or not, they can leave it in the warehouse, or out in the sun for a couple of months and then ship something that completely ruins your product.
It is literally turning over your entire business to these fulfillment centers, and completely unregulated and unlicensed.”
Representative Lamberth then makes the claim that some of these fulfillment centers are labeling and bottling wine.
May I respond
First, fulfillment houses make their money from shipping product, if they don’t ship wine, they don’t make money. So it is against the best economic interest of a fulfillment house to hold product and not ship it.
Lamberth claims that because the fulfillment house has your wine, they have 100% control over your product and 100% control over its destiny and that is dangerous.
If that is Mr. Lamberth’s major concern, then let’s look at this closely. To illustrate let’s look at Tennessee’s number #1 business, FedEx. When FedEx gets your package, they have complete control over it and technically they could dump it in one of their warehouses for a couple of months. Obviously Fedex does not do this, because they make money off shipping, and acting in this manner would be against their best business interest.
Yes, there may be times when FedEx does not deliver optimal service, but that is rare versus common.
The fulfillment center akin to FedEx makes money by shipping product, so why would they not ship product. In rare circumstances where they don’t ship product, the winery has legal recourse against the fulfillment house.
Mr. Lamberth’s purge of fulfillment centers, aims to throw the baby out with the bathwater, while the bathwater provides a great temperature and almost perfect comfort to the baby.
Second, if Mr. Lamberth’s aim is to protect Tennnessee winery’s from claims that bigger businesses are hurting them financially and not providing their product to market in the most optimal way, let us look into every element of the alcohol system, that includes whether distributors in Tennessee and other states are allowing small Tennessee brands optimal access to markets. So Mr. Lamberth let’s not stop your crusade 10 yards short of the goal line.
Third, Mr. Lamberth indicates that there are fulfillment houses that are botting and labeling wine. I would like him to present evidence of which fulfillment house, which is unlicensed as a winery is bottling and labeling wine. Without evidence these claims are just hyperbole. Mr. Lamberth needs to come forward to report the fulfillment centers, that are unlicensed wineries that are bottling and labeling wine.
Fourth, does Mr. Lamberth actually know the benefits a fulfillment house provides to the marketplace? I will illustrate, if a small Tennessee winery wants to ship one bottle to New York, it is very expensive and maybe not even cost effective. A fulfillment house, can store that product and ship it for the Tennessee winery at a lower cost. Because fulfillment houses may ship thousands of bottles to New York, through economies of scale, they can obtain a lower price for the small Tennessee winery to ship its product to New York. That could allow the shipping to become cost effective and provide the Tennessee winery exposure to a new market.
There are other great benefits of a fulfillment house and I won’t be covering them all. But what I want is for Mr. Lamberth to look beyond his superficial comments.
I know the wholesaler lobby or someone is putting him up to this, but he may need to be careful because he is starting to sail out on the ship of fools.