It may be that Karl Rove, deposed political operative and widely acknowledged architect of the swift boat credibility attack on John Kerry in the 2004 Presidential election, has nothing on Rich Bergsund, CEO of Wine.com.
It would seem that both are fully willing to reach deep inside the bag of dirty tricks in order to achieve their goals.
For Wine.com, their goals are obscured by the canard of wanting to change the laws for the entire industry, but that’s not a very dense smokescreen. I would posit that it has more to do with eliminating competition. This dueling positioning is, at best, dubious and, at worst, despicable and therefore the crux of this post.
I have absolutely no issue or challenge with somebody, anybody doing good for goods sake—acting as a whistleblower for the sole purpose of trying to right a wrong for the sake of doing the right thing. It’s only when somebody does this with less than noble intention, the opportunity for remuneration, or for bettering of their own position that it crosses over into slimy territory.
What Wine.com is doing is exactly akin to your buddy telling your girlfriend that you’re (insert perceived disrespect) in order to drive a break-up between you and your girlfriend. Said friend subsequently swoops in to provide comfort to your now ex-girlfriend.
It’s just one of the unwritten rule no-no’s that you don’t do. There is no crying in baseball but there is honor in the gentleman’s agreement that is love, life, baseball and business—if you want to throw a pitch on the inside of the plate, no problem, but don’t throw at somebody’s head.
First, a little context (and if you want to see a run down on this issue separate from my digest version, check out Vinography.com here).
Basically, wine.com is ordering wine from competing online retailers, many with brick and mortar stores, and having those orders shipped to them in order to create a paper trail of an alleged illegal wine shipping transaction. Wine.com is then sending letters to that states alcohol enforcement division turning in the culprits. It’s an entrapping sting operation. And, where wine.com is doing this happens to coincide with where they have a physical infrastructure in order to comply with the letter of the law in those states. Their contention is that retailers are shipping illegally and they are shipping legally. Therefore, the other retailers should be punitively punished and if the enforcement agents aren’t wise, then Wine.com will make them wise. How generous of them and completely in keeping with Bergsund’s contention that they want an even playing field (yes, I’m being sarcastic).
According to Rich Cartiere’s Wine Market Report (found here)
Wine.Com says it is taking the unusual and controversial actions because alcohol regulators that require out-of-state retailers to set up in-state operations for direct wine shipping are not uniformly applying and enforcing those regulations, putting the high-profile Wine.Com at a competitive disadvantage to its otherwise numerous illegal peers. Wine.Com has opened facilities in each of those states.
Bergsund goes on and is quoted as saying:
Wine.Com CEO Rich Bergsund says his company wants “nothing more or nothing less than just a level playing field” for everyone engaged in interstate direct shipping.
In the comments section at Alder’s post on Vinography.com, Bergsund says:
SO…we think it’s time for answers on this topic by the state regulators to either:
1) enforce their laws uniformly and fairly OR
2) open up to interstate shipping
We’re ok with either outcome, though the second would be the best for the health of the online wine market. Keep in mind that online wine is still tiny compared to overall wine. The biggest barrier to growth in online wine is the current stalemate on state laws. If we can use our legal standing in a state to get their attention to the issue, maybe we can bring about changes that will benefit the online wine business.
Unfortunately, Bergsund’s contention rings hollow. What this really boils down to is another quote from the Wine Market Report:
“We’ve had to ask ourselves whether we are wasting our time and energy having all these warehouses all over the country or not while others apparently do not,” added Bergsund. We deserve an answer on that.”
If he were truly interested in protecting his business and ensuring its growth he would be hiring counsel and a lobbyist and engaging with lawmakers like thousands of other special interests due everyday, many successfully. He would be doing this while building out his own business against his competitors.
Or, he could join the Specialty Wine Retailers Association, which he is supposedly not a member of, and whose sole cause is to ensure a free market for wine shipping for wine retailers of all stripes.
Allow me to give Bergsund some advice, a bit of counsel and insight that his Stanford undergrad and MBA didn’t afford him on his path to partner at management company Bain & Co., before joining the CEO circuit: if you want to do this sort of thing, have it two layers removed from your company and being executed by a lawyer, a consultant working behind a non-profit association, an intern or the WSWA association, who would undoubtedly take a check from you to engage in this kind of thing. This way, when the PR roils up you may get caught in the collateral crossfire, but not completely in the middle of the bullseye. I went to a middling 2nd-tier state school in the Midwest, and I know this …
Instead, the Wine.com tactics are transparently exposing the company for seeking to eliminate competition by narc’ing on competitors to advance their own cause.
Integrity? I hardly know ye. Somewhere the Karl Rove politico tactics book is being put back into its place on the book shelf; pages dog-eared and tattered by a wine retailer. What a shame.
Author Note: The Wine.com Affiliate Sponsorship is Coming Down ...