Gallo's Control of the Wine Market

Unless you're in the wine biz you probably missed the huge sale of wine brands between the two biggies in the U.S. wine market, Constellation Brands and Gallo. Gallo just bought 30 brands from Constellation including Clos du Bois, Mark West, and Ravenswood. Gallo now owns over 30% of the U.S. market. That's big, too big.

Corporate Wine

The largest wine companies are Gallo, Constellation, The Wine Group, and Treasury. Other large wine conglomerates are Bronco, Diageo, and Trinchero. The trend over the last few decades has been toward corporate ownership often because families who want to sell usually don't find buyers except for big operations with deep pockets.

Gallo's Market Control

Wine goes through a three-tier sales channel meaning the producers sell to a middle-man, the wholesales, who then resell to the retailers. You either buy your wine directly from the winery or via the three-tier system. Wholesalers hold a lot of sway especially if you're big, powerful and known as a bully as is Gallo. Many retailers can't afford to piss off their Gallo wholesaler and lose the likes of Barefoot Wines on their shelves so they will often do as directed by Gallo's salesperson.

There's no way one person who makes a few thousand cases a year can compete. So their wine is most likely found only in the small wine shops, if anywhere.

Gallo now owns about 90 brands. At the lower end of the market their control is pretty much a monopoly. An entire liquor store or even grocery store could be nothing but Gallo wines and you'd probably never know it. 

Why This is Bad

Gallo has a habit of homogenizing wines. Almost all Gallo wines will taste the same every year. "Real" wine doesn't quite work this way, but then many wine buyers prefer knowing their wine will taste exactly the same every time. This is winemaking through chemistry.

Any way I look at it this level of control is bad for the U.S. wine market.