June 2013
How did
the convention go this year?
Fantastic. There has
been record interest from new exhibi-
tors and great reviews from members.
Currently, the WSWA has more interest
in membership from the wholesale tier
than we have seen in the last 20 years.
How do you explain the growth
in membership?
It’s interesting—30 years ago we
had 700 members, then we went down
to 100 and now we are scaling back up.
Like many other industries, we have seen
huge consolidation, and when an indus-
try is led by very large wholesalers and
suppliers, it creates opportunities for little
guys to start back up.
The other factor is innovation and
growth. People are fascinated by craft
spirits and boutique wines and so many
individuals from other industries are en-
tering our business—in production, mar-
keting and representation. Right now we
have a lot of traditional beer distributors
who want to apply for membership be-
cause they are getting into the wine and
spirits business. And WSWA has been
very welcoming—there is a great recog-
nition that our organization can’t be top-
heavy. We need representation from mid-
dle-size distributors and small distributors
on the executive committee as well.
What do you predict will be the
most critical issues that will define
your term as president?
Some things don’t change—it will be
the same issues that have been on the
agenda for the last 50 years. For example,
the fight over legislative taxes which could
impact all of our businesses. Many of our
members are Subchapter S companies,
which means they are not taxed at the
corporate level, just at the personal level.
It’s very advantageous to family-owned
businesses. There is a threat to this which
would change the nature of many of our
members’ businesses. There are also es-
tate tax issues which are important. Our
members need to understand we are
representing them in Washington and the
contributions to our PAC are crucial.
What about challenges to the
three-tier system?
We remain very focused at the state
level on issues of access: wanting to give
consumers access to products, yet not
destroying what is a very effective three-
tier system. Each state is looking at that
a little bit differently. In every case, it really
comes down to the state’s right to gov-
ern the distribution of alcohol—the 21
Amendment. We have taken a public po-
sition that the three-tier system is part of
our mandate and the right of each state to
regulate is paramount.
When it comes to privatization we sup-
port whichever way a state decides to go,
but we don’t want to see what happened
in Washington State happen again. I think
everyone would agree that did not work
out—even Costco. Let the state make
their own determination, but let’s put the
appropriate system in place.
One of my goals this year is to make
sure we have enough dialogue with other
organizations—retailer groups, NBWA,
DISCUS—so we all have input on what
the system will look like in other states that
might be moving in this direction.
What would you say to those—in
and outside of the industry—who
believe wholesalers don’t add value in
today’s sophisticated marketplace?
The wholesaler is more important
than ever in today’s market. We provide
an essential route to market. There are
so many new products and innovations
in our business, but without market ac-
cess, they are lost. We serve as the
marketers, the local logistics companies,
the educators—suppliers rely on us for
so much. It’s our job to make sure retail-
ers can sell product to consumers—you
can always sell in, but if it doesn’t move,
you’ll never make another sale. Whole-
salers in many markets have changed
their structures to meet market and our
customers’ needs.
Eye On the Future:
One-on-One with Doug Hertz
Incoming WSWA President Discusses His
Term, and Why the Wholesaler is More
Important than Ever
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