Roger LaMarque
Roger LaMarque
I'm always just a tiny bit pleased when I get a flawed bottle from CSW. I get to bring the bottle back and I inevitably leave with two or three bottles. It's like the opposite of the Thunderdome.
Who assumes the risk of corked bottles?
- Thread starter VLM
- Start date
scottreiner
scott reiner
in ny, yes
Oliver McCrum
Oliver McCrum
As has been pointed out the great majority of consumers have no idea what the word 'corked' means, or that such a defect exists, let alone what it smells like. A shocking number of people in the biz are pretty near as bad. In practice (speaking as an importer and distributor) this means that almost no wine gets returned; I would say our % corked has held steady at way less than 1% of sales, even a few years ago when the actual proportion of defective wine was much higher than it is now. (Much of the wine that is returned isn't in fact defective. A number of businesses have a 'customer is always right and the wholesaler can pay for it' policy where they take back wine for any reason, write 'corked' on the label and leave it for the rep.)
This also means that most of the corked wine is drunk, the producer being assumed to be incompetent (at least, this has been the case when I've talked to consumers about bottles they've drunk that were clearly corked; they just assume the producer doesn't know what he's doing). It's a very strange product defect, in that it affects a shockingly high proportion of the product, clearly diminishes the consumer's experience of the product, but is almost unknown and hence unrecognisable.
I have only worked in CA and NY but in both of those states wines that are clearly defective can be returned to the wholesaler. I don't try to collect from the producer unless there is an atypical problem, such as happened with the original Altec stopper.
This also means that most of the corked wine is drunk, the producer being assumed to be incompetent (at least, this has been the case when I've talked to consumers about bottles they've drunk that were clearly corked; they just assume the producer doesn't know what he's doing). It's a very strange product defect, in that it affects a shockingly high proportion of the product, clearly diminishes the consumer's experience of the product, but is almost unknown and hence unrecognisable.
I have only worked in CA and NY but in both of those states wines that are clearly defective can be returned to the wholesaler. I don't try to collect from the producer unless there is an atypical problem, such as happened with the original Altec stopper.
Cristian Dezso
Cristian Dezso
If you invest your money through a manager that month after month beats the market, do you pull your money out after two months of underperformance? Perhaps. Though I doubt that there are many who do so. The idea is that consumers have to know the risk. Whether that information is accurate, verifiable, etc etc that is a different issue. Plus, this "risk metric" if you want, is based on the assumption that the infected bottles are allocated randomly across markets. If, on the other hand, some batches are more infected than others, that is a different story.
Cristian Dezso
Cristian Dezso
Were there some new gadgets invented, whereby the back label has some sensors that are temperature sensitive, and whenever the temperature reaches above X degrees, the label permanently colors in red, so in that way you know? Of course, how long the exposure, etc all matters, but I am sure that the sensors/microchips could be programmed to tell you.
Florida Jim
Florida Jim
Isn't someone already doing this?
Best, Jim
Cristian Dezso
Cristian Dezso
That's what I seem to recall, and I brought it up because this thing would, in theory, eliminate cooked, read overheated, bottles from the market. The first party in the chain who observes the red color could then reject the bottles, or accept them at a lower price. Evidently, the problem would then be the producer, who could bottle the wine, keep it in poor conditions, and slap the temperature sensor right before the bottle leaves the door.
John Ritchie
John Ritchie
I don't think there's any way to get accurate reporting on how many bottles from a particular vintage are corked for so many reasons: communication on the supply chain, customers not realizing if the wine has a fault, wrongly attributing the kind of fault, etc. I'm not sure about others' experiences, but many wines that get returned to retail stores usually tend to be because a customer just doesn't like the wine and assumes it's bad. That's always an unpleasant situation.
Oliver, it's not just the producer who is being assumed incompetent- in hand-sell situations where the wines might not be familiar, I'd say we retailers take the brunt of the blame. It's even more of a problem because rather than thinking they've just made an unlucky choice the consumer believes they've received bad advice.
SFJoe's Posner (or Claude's Calabresi), seems to be hand in invisible hand of the marketplace.
But from a practical standpoint, I tend to get all mucked up with circumstance. Perhaps it's closest to something along the lines of "Primum non nocere."
1. Slightly corked at a non-foodie, raucous dinner out with friends, where everyone else is tossing it back and I'm not playing the go-to guru? I'm not likely to be the wet blanket. But I might order a beer.
2. A purchase from one of my buying junkets in NYC? After I felt like a complete douche after bringing back: I. a corker, sure, but from Chadderdon, which just means the shop's gonna eat it; and II. an '02 Cazin Romo which a table full of so-called geeks convinced me was corked, only to now have David's cocked eyebrow forever accompanying my memory of its gorgeous perfume the following morning... well, perhaps it's better to let these types of karmic things just work out on their own.
3. That said, a purchase out of my own shop opened at home and that can get passed up the line to folks with greater economic resources and "abilities to affect change?" Yup.
4. Finally, a customer coming back to my shop with something they think was maybe off? Hallelujah! That's the sort of dialog we want, regardless of whether it was actually off or just a palate miss. Hopefully, we'll have the ability to evaluate the wine together and bond a bit over said "teaching moment" if the occasion merits.
SFJoe's Posner (or Claude's Calabresi), seems to be hand in invisible hand of the marketplace.
But from a practical standpoint, I tend to get all mucked up with circumstance. Perhaps it's closest to something along the lines of "Primum non nocere."
1. Slightly corked at a non-foodie, raucous dinner out with friends, where everyone else is tossing it back and I'm not playing the go-to guru? I'm not likely to be the wet blanket. But I might order a beer.
2. A purchase from one of my buying junkets in NYC? After I felt like a complete douche after bringing back: I. a corker, sure, but from Chadderdon, which just means the shop's gonna eat it; and II. an '02 Cazin Romo which a table full of so-called geeks convinced me was corked, only to now have David's cocked eyebrow forever accompanying my memory of its gorgeous perfume the following morning... well, perhaps it's better to let these types of karmic things just work out on their own.
3. That said, a purchase out of my own shop opened at home and that can get passed up the line to folks with greater economic resources and "abilities to affect change?" Yup.
4. Finally, a customer coming back to my shop with something they think was maybe off? Hallelujah! That's the sort of dialog we want, regardless of whether it was actually off or just a palate miss. Hopefully, we'll have the ability to evaluate the wine together and bond a bit over said "teaching moment" if the occasion merits.
Claude Kolm
Claude Kolm
Christian, you missed my point. In order for consumers to know the risk, they have to understand how probability works. The vast majority don't understand it and will incorrectly take normal probabilistic variation as a sign that the stated risk is wrong. That thereby creates a huge nightmare for anyone who tries to explain it to them (probably the retailer, but possibly the wholesaler).
Scott Kraft
Scott Kraft
What's Goldman Sachs' position? They seem to have a way with tainted products.
Claude Kolm
Claude Kolm
Actually, cork producers teach producers how to test a batch of corks for the rate of corkage. They used (i.e., about 12 years ago when it was explained to me at a prestigious estate) to tell producers to test for and accept a 5% corkage rate. These days, with the pressure on the cork producers, I expect that it is a lower rate.
Jonathan Loesberg
Jonathan Loesberg
Just for the record, and without defending the moral probity of what GS did, what they are accused of doing is selling investment instruments without telling the investors to whom they sold them that they were also creating hedges against those instruments falling in value. Their response, which is not without merit, is that the people who bought those instruments would have known, as a matter of how the market place worked, that there would certainly be a way of betting against the instruments' paying off at face value. I don't think this case would make a criminal prosecution and I'm not sure of its odds in the civil prosecution being brought. There was plenty of negligence and greed that brought about 2008, and GS partook in all of it. And if the headlines of the case bring about reasonable financial reform, then that's fine with me. But I'm not sure, given the state of regulations now, that they are guilty of more than doing what those guys do do when they do do what they do.
Cristian Dezso
Cristian Dezso
I agree!
kirk wallace
kirk wallace
and I think the concept stems from Ronald Coase.
Claude Kolm
Claude Kolm
What Ned said. They are accused of offering to deal cards and representing to one party that the cards had been shuffled by a neutral party, when in fact they allowed the other party playing the game to stack the deck. If those allegations are true, it certainly is civil fraud and the only question about criminal fraud is whether there is sufficient evidence to meet the higher standard of proof. I know of no lawyers (other than those retained by GS) who would analyze it differently, and I've discussed it with several of my colleagues, some of whom are securities specialists.
GS's responses are showing that they can spin with the likes of McConnell and Boehner. But then, if you're doing God's work, . . . .
GS's responses are showing that they can spin with the likes of McConnell and Boehner. But then, if you're doing God's work, . . . .
Jonathan Loesberg
Jonathan Loesberg
I'm sorry. They were betting against the derivatives. So were many others. At this very moment, there are investors betting against the success of some investment or another. That's how the market works. Unless they had more information than their investors had--and their argument, which is at least not irrational--is that their investors had the same information they did, they did not possess greater certainty as Ned asserts. And, of course, they did not possess greater certainty since in the event they also invested in these things and lost money, a bundle more than they made. To the extent that they did not inform their investors, there is a case for deceit and civil fraud, but it may not be a great case, depending on who those investors were. In short, GS was "defrauding" others who, like themselves, invested in these things and lost money. If someone wanted to go after someone, they might start with Magnetar, but it's less glamorous and the tentacles are more unsettling.
Again, I'm not defending their moral probity. And I'm certainly not defending the way mortgages were offered, accepted and then repackaged so that no one could see what they were buying and selling clearly. And I'm certainly in favor of considerably more financial oversight than is even being currently considered. The alternative is not between sending Fab Fab to the clink and signing on with Republicans, or even with the current bill, which doesn't go nearly far enough. I'm just saying that as a symbol for what went wrong, GS is really not as great as, say Enron. It's more in Martha Stewart territory.
Again, I'm not defending their moral probity. And I'm certainly not defending the way mortgages were offered, accepted and then repackaged so that no one could see what they were buying and selling clearly. And I'm certainly in favor of considerably more financial oversight than is even being currently considered. The alternative is not between sending Fab Fab to the clink and signing on with Republicans, or even with the current bill, which doesn't go nearly far enough. I'm just saying that as a symbol for what went wrong, GS is really not as great as, say Enron. It's more in Martha Stewart territory.
Claude Kolm
Claude Kolm
Jonathan - Their betting against the derivatives is not the crime that they are being charged with. They did bet against the derivatives in other instances, and although that's pretty smelly and risked the world economy for GS's financial gain, it was not a crime based on what we so far know.
Their alleged crime had to do with setting up a deal between two other parties and telling one of the parties that the deal was fairly set up, when in fact they worked with the second party to see that the first party would lose. The reason Paulson hasn't been charged, I presume, is because Paulson made no false representation to the first party.
And Martha Stewart,by the way, got what she deserved under the law that has a very distinct purpose in order to prevent obstruction of justice. This ain't criticism and you ain't a lawyer.
Their alleged crime had to do with setting up a deal between two other parties and telling one of the parties that the deal was fairly set up, when in fact they worked with the second party to see that the first party would lose. The reason Paulson hasn't been charged, I presume, is because Paulson made no false representation to the first party.
And Martha Stewart,by the way, got what she deserved under the law that has a very distinct purpose in order to prevent obstruction of justice. This ain't criticism and you ain't a lawyer.