Private label good or bad?

I typically write my column on the Saturday prior to its printing on Wednesday. We are heartbroken at the scenes playing out across Napa and Sonoma counties. We have received requests for information from many of you regarding the damage to wineries and vineyards. The information coming out of “the valleys” is at best sketchy right now. We will have further updates next week. Please keep all of our friends and wine industry colleagues in your thoughts and prayers.

Private labeled wine is an ever increasing part of our industry. With that growing percentage of the business the debate about the concept being good or bad rages. So which is it, good or bad? Private labeled wine has been around for a long time it basically involves an entity buying bulk wine, so wine that is already fully vinted that for quality reasons a winery wants to dispose of. They sell it to the entity which then bottles the wine and slaps a label on it.

We have contemplated doing this at the dinner party from time to time but have always decided against it. If we ever were to go down this path we would likely call it George and Mary’s Red Wine. Straight forward, we are not making the wine rather labeling it and letting consumers know it is not our wine but wine we like that we had bottled for our shop and are selling it under our own brand. Full disclosure, no secrets.

Here’s the rub. The big outfits pursuing this private label model do all they can to hide it from the consumer, to make the brand look like a real winery. Recently two major grocery store chains that serve the North Idaho market have moved to make fully 70 percent of the wine they offer private label. At any given big box wine or liquor retailer the numbers are even larger as they strive to generate the “lion’s share” of their revenue and due to the nature of this business, an even bigger slice of their profits from their own labels.

The most important part of any wine transaction is that you the consumer like what you purchase. If you feel that bottle of wine is worth what you paid for it then it is a good deal, if not then it is a bad one. It goes a bit deeper though when it comes to private label because of what it is.

Remember that wine that gets bottled under a private label has been bulked out from a winery who for whatever reason didn’t want it. Begs the question if it is so good why didn’t the winery bottle it for its own business? In many cases the simple fact is this bulk juice did not make the cut!

Another issue for a consumer is that the same wine is unavailable in subsequent vintages and if it is available will not be the same. Since the bottlers are buying bulk wine wherever they can get the best deal it is unlikely the same winery and winemaker will have the same wine available year after year. The “deal” part of the private label is a big factor, by purchasing inexpensive surplus wine and then bottling it for their use any of these big box operations can mark it at huge margins with little regard for the quality. They just need to sell what they have and move on. Since they control the entire market for any given privately labeled bottle they have no price competition.

As an aside this is why Idaho Liquor Law is so well thought out. Strict private labeling is illegal. Every wholesale purchaser has the right to buy the same array of wines, so even if a wine is private labeled for a huge grocery store chain I too as an independent retailer can buy it. The distributor has to sell it to me and at the same price or they are in violation of the law.

Finally these chain stores that are becoming increasingly dependent on private label to survive are very clever. Instead of being upfront about it and calling it George and Mary’s Red they develop a name that sounds like a real winery, “Falcon Ridge,” “Sunset Valley” and the like to further hide what they are really selling.

What is a consumer to do to ensure they are getting wine made by a real winery and real winemaker? That part is actually quite simple, ask the question. When you are in any big box store ask “Is this wine part of you private label program?” If the salesperson dodges that tells you the likely answer but don’t be afraid to push further, “What is the name of the winery that makes this? Where is the Winery and who is the winemaker?”

Whether or not you like a wine and feel it is worth what you are paying for it remains the most important part of the relationship with your wine retailer. It might be nice to know too though if they are hiding something and might cause you to wonder why.

If there is a topic you would like to read about or if you have questions on wine, you can email George@thedinnerpartyshop.com, or make suggestions by contacting the Healthy Community section at the Coeur d’Alene Press.

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George Balling is co-owner (with his wife Mary Lancaster) of the dinner party, a wine and table top décor shop located by Costco in Coeur d’Alene. George worked as a judge in many wine competitions, and his articles are published around the country. You can learn more about the dinner party at www.thedinnerpartyshop.com. Be sure and check out our weekly blog at www.thedinnerpartyshop.com/home/blog-2. You can get all of these articles as well as other great wine tips by friending us on Facebook at www.facebook.com/#!/dinnerpartyshop.