As I spoke with a client, I was made aware of something that has – to date – escaped me, and probably a whole lot of other people in this business, too. Most of us just go about our day-to-day lives, while the E.J. Gallo Winery Sales wine school is headed toward cornering the wine market. Some would say, “Fine, I don’t have time for that.” Others – like me – will say, “What?”
I went to the site and began to read….
Gallo Management Development Program
Our accelerated, one-of-a-kind program offers a depth and breadth of learning unlike any other.
As part of our Management Development Program, you’ll find a unique level of challenge and opportunity…in a fast-paced environment with exciting career paths and outlets for your initiative.
You can choose one of three guides:
- James ~ Current Management Development Participant (MDP)
- Armando ~ Eight (8) year veteran
- Catalina ~ 10 year veteran
When I clicked on James, I read the following, and it only took me a millisecond to “get it:”
Through the Gallo Management Development Program, you’ll gain extensive, on-the-job training across all aspects of sales. Serving as a sales representative with our distributor partners, you’ll develop and provide expertise in wine education, selling through display and restaurant merchandising, retail advertising and promotions and competitive pricing. Ultimately, you’ll be the driving force in helping Gallo stay connected to our consumers.
What could I possibly see “wrong” with this picture? Let’s just take the very last sentence and change the very last word to “customers,” and you have a whole new dynamic. Of course, they wouldn’t be that blatant to just write “customers…” like their distributor partners, but let’s think about this for a minute:
- Line up with a wholesaler with “James” as your new employee, while going through Gallo’s Management Development Program, and James is already keeping every inch of shelf space “occupied” by Gallo.
- Does this constitute a monopolistic environment?
- Or is this headed toward a monopsony
If you wonder what’s making me go in this direction…
A Wikipedia review of important economic terms and their definitions:
- In economics, a monopsony (from Ancient Greek μόνος (mónos) “single” + ὀψωνία (opsōnía) “purchase”) is a market form in which only one buyer faces many sellers.
- In the microeconomic theory of imperfect competition, the monopsonist is assumed to be able to dictate terms to its suppliers, as the only purchaser of a good or service, much in the same manner that a monopolist is said to control the market for its buyers in a monopoly, in which only one seller faces many buyers.
- In addition to its use in microeconomic theory, monopsony and monopsonist are descriptive terms often used to describe a market where a single buyer substantially controls the market as the major purchaser of goods and services. Examples include the military industry and the space industry.
Now, Gallo might argue, “We’re just part of an oligopoly.” (Again, Wikipedia: An oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). Oligopolies can result from various forms of collusion which reduce competition and lead to higher costs for consumers.
It’s where this is all going… Squeezing out all of the mom and pop businesses. The big companies argue that the mom and pop business can still sell directly to consumers, assuming that they can get them interested. But in the end, your shelf space is controlled by the big four and no more… Amen.
I wonder how many more years we have left, before that’s all you’ll get in the supermarkets… what the big four are delivering…