Another case has come forth of bribery occurring at a major supermarket chain with a large winery and a large wholesaler alleged to be involved. We can rinse and repeat as these stories repeat themselves time and time again.

According to the San Francisco Chronicle, the main buyer for Albertsons took bribes from a large supplier and that employees of a large national distributor were also alleged to be involved in bribery.  

The wholesale tier will tell you they are responsible for diversity of products, but what they won’t tell you is their products are squeezing smaller players out of the markets. It is one thing to compete against bigger marketing budgets, but it is another thing to compete against a rigged system and flat-out bribery and corruption.

I have seen it as a regulator and my time in private practice; small producers are forced into a three-tier system with no alternative available to them. You may think you have the best product in the world, good luck having a tequila or rum when the wholesaler already has five in stock.

Even with the tough odds against them, small producers are even bigger losers when they lose shelf space to suppliers or wholesalers willing to bribe their way onto shelf space. There is no way a small supplier could afford to pay for Hawaiian vacations, luxury hand bags, and golf trips to Pebble Beach.

We heard the out cry about how Blue Cloud could not exist, because Pepsi would use their food and soft drinks items to indirectly pay slotting fees, even no evidence existed that they would commit such an offense, an assumption was enough to get state regulators worked into a frenzy. Yet, there is no outrage or calls to revoke a license when a large distributor is involved in nefarious activities. It is pay a large fine and go on with your life.

We need to have a real conversation here, the three-tier system is a barrier to entry and the bribes offered from and accepted by large members of each tier make the landscape inhospitable.

The only positive solution for the marketplace is to open up alternatives to the three-tier system by direct-to-retail and direct-to-consumer sales. As the three-tier system is really a game of large players taking turns stepping out of line and getting back in, it is time for a more open market.