E. & J. Gallo Winery Case Study Essay

1449 Words Apr 14th, 2012 6 Pages
Case 25: E. & J. Gallo Winery

Introduction The dessert wine industry realized huge success during the great depression years when buying regular wine was a luxury that few could afford. Characterized by its sweet taste, high alcohol content, and cheap price it was until the 80’s an easy to buy alcoholic beverage that gave people with lower income the opportunity to have wine on their table. The 1980’s was a decade of change in people’s lifestyle with an emphasis on healthier habits and thus, consuming healthier products. This change, combined with an increased consciousness about society’s moral obligations had a negative impact on dessert wine, since it was viewed as a cheap wine with higher alcohol content than regular
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One could argue that the product is legal to be produced and sold in a responsible manner and thus, actions to stop its production would not be ethical. Gallo is not purposely targeting alcoholics or minors by producing a cheap wine. However, their products have shown that they appeal more to these categories of consumers, and thus they create many discussions of whether it is ethical to produce this type of wine. That, combined with the fact that the company has historically played both sides of the proverbial fence by providing campaign contributions for both political parties and following a policy of hedging its bets to curry favor in them, in order to seek favorable legislations regarding potential legislation affecting the industry, is creating even stronger arguments of whether the company is performing in an ethical manner.

The company has tried unsuccessfully to remove the dessert wine products from the shelves, by limiting production and stopping the production of such wines. One of the main arguments for reentering the market and continuing the production of Thunderbird and Night Train was the fact that even if production is stopped by E. & J. Gallo Winery, the gap will be quickly filled by other brands produced by alternate companies. This is also supported by looking at the niche that the company is occupying currently in the dessert wine market which is at 16.1%. Nevertheless, since it is a family owned company and one of the

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