EPISODE #13 FORMATION OF WINE FAIR TRADE COALITION/WFTC

Episode #13 will take you into the room where Ken Starr was the guest speaker to a group of interested winery owners and personnel to discuss the next steps to take just 90 days after the landmark Supreme Court ruling in Granholm v Heald that opened up direct shipping of wine from the producer to the consumer in most of this country back in 2005.

I was a participant at this luncheon, albeit reluctant at first, as I was six weeks into my recovery from a heart attack and a 5-level bypass surgery. But, I became active and found myself taking charge as the majority of the winery personnel in the room stayed on the sidelines when Ken Starr was explaining he believed that the Federal Trade Commission would be willing to go further to help knock down more of the anti-competitive barriers that wineries still faced as a vestige of the post-prohibition era.

I stood up and started speaking when I should have stayed seated. But I couldn't let this opportunity to take on Franchise Laws pass us by. I ended up founding an organization I named Wine Free Trade Coalition, or W FTC if you will to establish a 501 (c6) non-profit organization to fund the effort. 

Take a listen.

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Transcript

EPISODE #13 FORMATION OF WINE FAIR TRADE COALITION/WFTC

SPEAKER

Fred Reno  

Well, Hi folks. Welcome back to the Fine Wine Confidential Book podcast with me, Fred Reno, your host. Episode 13 captures a moment just 90 days after the landmark Supreme Court ruling that opened direct shipping to consumers. Ken Starr believed that the Federal Trade Commission was ready to challenge further the restrictive laws wineries still faced under the stranglehold distributors had on their business. Take a listen and understand that the fight for free and open market access still continues 21 years later. 

 During my recovering from a Heart Attack and five-level bypass surgery in late May of 2005, I received the call in the first week of July from Tracy Genesen, who was both a friend and the legal arm of the Coalition for Free Trade asking me to attend a luncheon where Ken Starr, whom the Coalition for Free Trade had hired to shepherd our case to the Supremes, would speak. Tracy told me that since I had been out for the past six weeks, she and Kirkland & Ellis had not been able to make any further progress in the mission to take on the anti-competitive practices in the wine industry. They continued to encounter the usual foot-dragging and other excuses that the industry always gave when it came to change, and who was going to pay for it. 

 I'm a bit overwhelmed by the call. I let Tracy know that my surgeon had just given me the green light to drive again the day before, and quite honestly, I'm still a little bit fragile and weak. I'm not sure if I can stomach or have the energy for this. She continued to plead with me that my presence would make a difference. I caved in, said yes, I will be there. To the best of my memory, the lunch was on Wednesday, July 6, and as I drove to Napa that morning, I replayed in my mind the many years and struggles I had experienced as part of a small group attempting to drive change in the industry. I reflected on how long it had taken to get to this point; however, I was apprehensive about how I would react in a crowd, as I had not had much interaction with groups since my surgery. 

 As I entered the room at Cardinale, I noticed several people I hadn't seen before, but for the most part, it was the same usual folks who attended many of these meetings in the past. I see Tracy, she comes over, gives me a hug, and welcomes me into the room. I say hi to Ken Starr and various other individuals, and get myself a glass of wine to calm my nerves. Then I found myself seated next to Jim Basile from Kirkland & Ellis at lunch, whom I hadn't seen or spoken with since my heart attack. It allowed me to thank him again for the legal advice and guidance he and the team at Kirkland & Ellis had provided during the fight in May that Henry Wine Group had with Veuve Clicquot of USA, just before my heart attack. As lunch begins, Tracy kicks off the meeting by thanking everyone for coming and introducing Ken formally to the group. Ken starts by recapping the Supreme Court ruling and its ramifications as he saw it. He then explains that Kirkland & Ellis had held numerous meetings with interested parties to identify the next logical target in the fight to sell their wines free from the vestiges of post-prohibition laws. 

 Several of the vintners at the head table commented, but it was mainly Ken talking. He then says he had indications that the Federal Trade Commission is willing and ready to go further, but they're looking for a road map. The industry needed to create a report, or a white paper, if you will, outlining the issues they still face and how they'd like to see them proceed. The Federal Trade Commission would then have a clear target.

 At this point, I could see that Ken's comments were not gaining any momentum or response from most of the winery leaders in the room to take the necessary actions. I could not help myself. I stood up, looked around the room, and stated: Excuse me, but I need to be Fred Reno for a moment. While I was shaking inside as adrenaline coursed through my body, I could tell I had stunned the group. What the hell are you all waiting for? Get your checkbooks out and start writing a check. Ken has made it clear that this is the moment we have the Federal Trade Commission ready and willing to help. They are asking us to provide direction in their efforts. We can now take on franchise laws. 

 Then I made a mistake. I kept speaking instead of sitting down. I have never been one to shrink, especially when it comes to Franchise Laws. I continued. If all of you are not willing or able, then I guess I will have to jump in. I turned to Jim Basile next to me and said, "Jim, do you have a coin on you? He reached into his pocket and handed me a quarter. I looked at Tom Shelton, who was then president of Joseph Phelps Winery. "Tom, I said, "you seem to be the only one in the room, besides myself, being vocal about this opportunity. I guess it's either you or me. I will flip the coin, and you call it. I flipped it. He called tails. It turned up tails. I looked at him. Well, I guess I'm now the President, and you're the Vice President of this yet-to-be-named organization. Ken starts to applaud. Most of the folks in the room join in. 

 I left that day, saying to myself on a drive back to Santa Rosa, what the hell did I just do? For the record, that quarter still sits on my office desk today. With legal guidance from Kirkland & Ellis, we filed articles of incorporation in California for the new organization I called the Wine Fair Trade Coalition, or WFTC. In September, we were granted our 501 c6. We were now legal and ready to accept money and fund the effort. At that point, the hard work began—more on this in the book.