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October 22, 2009
Amazon Puts Wine Program on Hold

Amazon.com, considered the world’s largest online retailer, may be bailing on its wine program, which never really got going, winebusiness.com has learned. After some two years of preparation, Amazon.com appears to be pulling the plug. In an email communication sent to wineries today, senior account manager Dini Rao said the company recently decided “not to resume shipping.”

“As you know, we were excited to work with you to build the AmazonWine business, Rao said in an email that went to winery partners. “For that reason, this was a very tough choice for us. “Many of you took the time and leap of faith to really support us.”

Amazon had been working on a wine launch and had at one point inked a deal to use New Vine Logistics of American Canyon, California to fulfill orders. The plan was to create a consignment system, where wineries earned 47 percent of the retail price for wine when sold.

According to industry sources, the logistics of launching the system turned out to be a regulatory headache that was difficult to overcome, an issue that was illustrated last summer when the California Department of Alcoholic Beverage Control issued an industry advisory raising concerns about online wine sales going through “unlicensed third party service providers” –websites where consumers can buy wine through a third party.

We will have more details as they become available.

 

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