AMAZON PULLS PLUG ON WINE?

While Amazon has not officially confirmed its exit from the field of direct wine sales, numerous executives in the wine trade received an email this afternoon informing them of their exit. The email, obtained by Wine Industry Insight and reprinted below, was sent by Dini V. Rao, Amazon’s Senior Account Manager for Business Development – Wine.

Rumors of Amazon’s pull out were first reported yesterday by Wine Business Monthly.

Wine Industry Insight  called Rao’s direct line and the message said she would be away on vacation until Oct. 27.

WII also contacted Amazon’s flackdroids, i.e., media relations department, but was unable to determine if they have actual live people to speak to. Our voicemail had not been returned by publication time.

WHAT HAPPENED?

The unexpected exit of America’s largest online retailer leaves scores of potential Amazon partners in a lurch.

The collapse of New Vine Logistics, may have spelled the beginning of the end. By September, according to insiders familiar with the situation, Amazon had begun to distance itself from New Vine/Inertia Beverage Group as a fulfillment partner.

This left other fulfillment partners — who have been concentrating on their own businesses — less eager to “get into bed” with Amazon, especially since it has been seen as dragging its feet and unreasonably stringing its partners along.

At the same time, the California Alcoholic Beverage Control Commission had been applying increasing pressure on the business model. As a result, one insider said, “instead of popping the cork, they pulled the plug.”

DINI RAO’S EMAIL

From: “Rao, Dini” <dinirao@amazon.com>

Date: October 23, 2009 1:00:46 PM PDT

Subject: AmazonWine update

Dear friends of AmazonWine,

I am very sorry to let you know  we have recently decided not to resume shipping.  As you know, we were excited to work with you to build the AmazonWine business.  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.

Thank you so much!  I am sorry that we won’t get to realize the vision on which we have collaborated.  Be well and may we work together again soon.

Warm regards,

Dini

Dini V. Rao, DWS

Senior Account Manager

Business Development – Wine