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Moving wine on the Web
Monday, August 27, 2007
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Safeway might open an office in American Canyon to sell wines over the Internet, according to the city of American Canyon.

The Pleasanton-based supermarket chain, which operates a grocery store in American Canyon and three others in Napa County, needs a conditional use permit from the city to open its future Internet wine sales operation office in an existing warehouse.
The 300-square-foot location at 125-D Mezzetta Court is “ideal” for the retailer’s plan to sell wine over the Internet, according to a Safeway memorandum filed with the city in May.

Customers could place orders for wine on the Internet, and the orders would be fulfilled in American Canyon, according to the documents from Safeway on file with the city.
Employees with New Vine Logistics Inc., the company that now occupies the majority of the 380,000 square-foot warehouse, will “assist” Safeway with warehousing and shipping logistics, according to the memorandum. The location of the Safeway office will not be advertised to attract walk-in customers.

Marah Whiteaker, a Safeway representative, declined comment Friday, saying the city has not yet approved the project.
The American Canyon Planning Commission is scheduled to review the proposal Sept. 27.

The public hearing to review the conditional use permit was rescheduled several times this summer, in part because the city staff wanted to make sure that a portion of the sales tax generated by the venture would remain in American Canyon.

“We wanted to make sure the point-of-sale was right here in American Canyon,” American Canyon Interim Planning Director Sandra Cleisz said Friday.

In its memorandum to the city, Safeway’s representatives wrote that “Safeway has the capacity to attract a very large volume of Internet-based business, especially within California where they already operate hundreds of grocery stores and have a large business base.”

“American Canyon would enjoy significant revenue from these taxed sales,” the memorandum concluded.

Safeway wants a license that would allow the retail sale of alcohol but would prohibit consumption on site.

Matthew Seck, chief of trade enforcement for the state Department of Alcohol and Beverage Control, said Safeway applied for the ABC retail sale license on June 29. His agency will not issue the license until the project is appropriately zoned, he said, adding that is up to the local jurisdiction.

There are 14,000 licenses statewide similar to the one Safeway is seeking, according to ABC. Seck said his agency does not differentiate which of these licenses are for sales via the Internet.

CalWine.com founder Al Jabarin doesn’t believe Safeway’s new venture will threaten his business, because his company’s focus is on selling boutique and hard-to-find wines on the Internet.

Some of his producers may only want to sell two to three cases of wine, said Jabarin, who estimates his Internet sales represent about half of CalWine’s business. Jabarin opened a retail store and wine tasting room in Napa to meet the needs of his suppliers and of his clients who want the tasting room experience.

“This is a niche industry,” said Jabarin, whose company will soon move into a new 2,500 square-foot facility in Napa.

Jabarin, who was not aware of Safeway’s plans, also wonders if people will pay shipping costs to find wines they can pick up at the store.

Yet Chris Edwards, director of operations for the Wine Tasting Network, a Napa distribution and online sales company, said he is not surprised that Safeway wants to sell wines online.

Many grocery stores in large market areas like New York and Boston sell wines online, said Edwards, who knows a half-dozen companies in Napa County that sell wines on the Internet.
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