Business

Wine and retailers: Are Idaho officials enforcing the rules?

Trader Joe’s has been offering its wine in Boise since the store opened in February 2014.

Trader Joe’s will not say how much “Two-Buck Chuck” — the colloquial name for the Charles Shaw-brand discount wines the chain carries — it has sold at its Boise store. “We can tell you that Charles Shaw is exclusive to Trader Joe’s,” said spokeswoman Rachel Broderick.

Under Idaho law, “no distributor shall restrict the sale of wine ... to one retailer.”

State law is designed to level the playing field and keep any one manufacturer, supplier or retailer from controlling the market or supply lines. In general, a manufacturer can’t also be the distributor or the retailer. That means that all wine must be sold to retailers by a distributor. And that distributor must sell its wares to any retailer.

So how is Trader Joe’s able to reach an agreement with its distributor that Charles Shaw wine be distributed only to Trader Joe’s and no other Idaho wine retailers?

Well, that’s the big question and no one wants to talk about it.

Trader Joe’s would not answer the question.

The sole Idaho distributor of Charles Shaw wine, BRJ Distributing, did not return the Statesman’s phone call or email.

Wine retailers the Statesman contacted all said they knew of no other retailer who had been able to order Charles Shaw or other exclusive Trader Joe’s wine. None of them wanted to comment for fear of being seen as critical to Idaho State Police, the agency that oversees their businesses and enforces the state’s alcohol laws.

Two retail wine customers who periodically place special orders through their favorite stores told the Statesman they each had tried to order wine stocked at Trader Joe’s only to be told by the retailers it could not be done because those wines can only be purchased at Trader Joe’s.

So what does Idaho State Police say?

If a distributor carries a wine product, “it has to be available to other retailers,” said State Police spokesperson Teresa Baker.

When told that Trader Joe’s had stated it has exclusivity when it comes to Charles Shaw, Baker said she did not “know particulars from any individual retailer but product has to be available to other retailers.”

PRIVATE LABEL ILLEGAL

Under Idaho law intended to encourage competition, a retailer’s name cannot appear on a wine bottle label.

Earlier this year, Idaho State Police informed Cost Plus World Market in Boise it was violating state law by selling wine with its retail name “World Market” on the bottle. ISP gave Cost Plus the option of a 10-day license suspension or a $1,000 fine. Cost Plus paid the fine.

“Cost Plus Inc. apologizes for the error and has taken steps to ensure it will not (recur),” wrote Cost Plus World Market beverage licensing manager Rhoda Regalado in a March 14 letter to ISP. Regalado did not return the Statesman’s call.

Other national retailers in Idaho carry house label or private label wines — Costco sells wine with its house brand Kirkland label, Whole Foods sells wine featuring its house brand 365 label — but the retailers’ names do not appear on those labels.

ISP declined to comment on the legality of house brand labels. That is a legal question, said Baker, “so we aren’t going to be able to answer it.” She declined to say if the ISP had sought a legal opinion on the question.

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