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News Alert: Amazon Wine To Shutter At Year-End

October 24, 2017

Since Amazon acquired Whole Foods earlier this year in a $13.7 billion deal, speculation has been rampant that the company would overhaul or discontinue its existing Amazon Wine program in order to make a major play in the food and beverage delivery business via Whole Foods’ existing footprint. Now, Amazon has done just that, announcing plans to shutter the Amazon Wine platform at the end of the year.

Tech website Recode reported today that Amazon has notified Amazon Wine suppliers that the platform would be folding on December 31. The company’s statement to suppliers today read, “[A]s Amazon continues to offer Customers additional retail options for buying wine, we will no longer offer a marketplace for wine at this time, and Amazon Wine will close on December 31st, 2017. Wine will continue to be offered through Amazon Fresh, Prime Now and Whole Foods Markets.”

Launched in November 2012, Amazon Wine allows wineries to list their wares on the mega-retailer’s online platform for a fee, and then ship wines directly to consumers themselves. Industry observers have noted that Amazon could potentially be in violation of tied-house laws for using the Amazon Wine model of accepting fees from suppliers for listing wines on its website, while at the same time holding a retail wine license through Whole Foods.

Originally announced in June, the Whole Foods deal has allowed Amazon to markedly expand its brick-and-mortar profile across the U.S., and also gain footholds in Canada and the U.K. Whole Foods operates about 460 stores across those three markets. The acquisition means Amazon can rapidly scale up its presence in both groceries and beverage alcohol, further intensifying the already competitive environment for national brick-and-mortar retailers like Kroger, Walmart, Target and others. —Daniel Marsteller

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