I am writing today to voice my opposition to the proposal to make it illegal for a wholesaler to charge a retailer for splitting a case of wine.  Although I do not currently charge retailers a split case fee, I have done an analysis on this topic.  There are three areas where it becomes obvious that delivering bottles instead of cases is significantly more costly. First when picking an order for a retailer an employee can grab a case of wine and keep going to the next item on the order rather quickly.  If he is picking bottles, he may need to go back to that same spot two or three times depending on whether he is picking 5 or 10 bottles. Additional time is need if he needs to open a case. Each additional trip to pick the bottles takes additional time.  Second is the area of checking the orders.  Our checkers have to review each order by case and by bottle.  Full case sales are simple since they are marked on the outside of the case.  A open case full of loose bottles requires each bottle to be examined individually for accuracy.  The third area of expense from bottle picking is in the area of breakage.  Loose bottles will always have an easier chance of getting broken then full cases.  Bottles have different heights and widths, making impossible to stack other cases on top.  A quick shift in a truck or on a hand cart can easily topple those cases to the floor.

For all of these reasons I am opposed to any proposal making it illegal to add a split case charge.  Feel free to contact me if you have any questions.

Jay Colston

Virginia Imports

I object to and oppose this petition that would regulate a cost recovery method that has been ruled on, approved and implemented very recently, which would prohibit wholesalers from adopting pricing that enables them to recover the costs associated with fulfilling bottle business in Virginia.

A substantial cost for bottle versus cases processing include, but is not limited to -

1. Additional costly specialized equipment, box making material, box machine (to put the bottles in) additional warehouse space, software upgrades and breakage costs ( the more touches a product gets within the picking and delivery script, the breakage increases) are among the on site costs that we incur.
2. Nine Full time associates with full benefits are employed within the bottle station during the night's production.
3. Two more full time associates are responsible for restocking and maintaining the condition of this department during the day shift.
4. Additional driver time is needed to sort, stage and present individual bottles upon delivery to verify count and condition during receiving at retail/ restaurant. Each bottle product requires more  time at check in than a case of product.??

 Regulation 3 VAC5-30-90 allows for costs to be recovered  and these are true ADDITIONAL costs incurred. The decision to impose a split case charge should remain an individual wholesaler’s business decision.

As part of a multi-state family owned company, I can add that in the twenty-two states that RNDC operates in, this is and has been in place for years and is an accepted cost recovery method. I can also add that the largest wine producing an consumption state in the US,California,also utilizes a bottle charge.

Thank you for your consideration.

Sincerely,

Gary Archuleta

Exectutive Vice President

Republic National Distributing Company of Virginia

I would like to submit my opposition to the “Petitioner’s Request” to prohibit an additional fee or upcharge on split cases of wine. 

Splitting and mixing a case of wine is much more labor intensive than moving a single full case of product thru the distribution channel; therefore making it a more expensive process.  Potential for breakage is much higher, adding additional costs.

Therefore a wholesaler should be able to determine the amount of these additional costs, if any, they wish to recover by charging an additional fee or upcharge on split or mixed cases of wine sold to retail licensees.

Buddy Buckner

Service Distributing Inc. 

I oppose any change that would prevent a wholesaler from charging a fee for a viable business cost resulting from increased manpower or delivery costs outside the normal course of business.  For example: a loose bottle order vs a full case order will incur increased manpower costs to staff and pick loose bottle orders. The risk of breakage increases when full cases are opened and loose bottles are individually picked. In addition, added costs for software changes are incurred when continued increases to loose bottle orders require software updates to bottle accumulation lanes and conveyor speeds on warehouse material handling equipment.  Added manpower costs are also incurred when a delivery driver has the check-in loose bottle orders vs full cases. Drivers can have a few loose bottles to hundreds of loose bottles for a single customer.

Breakthru Beverage Group is a family owned business that operates in 16 states across the United States. We have historically charge a Split Case fee to recover certain operational costs.

Thank for the opportunity to express my concerns on this topic.

Sincerely,

Dale F. Farino

President

Breakthru Beverage Virginia