2017-06-01 Liquor Commission Minutes

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these places that are member specific areas of the resort. No hotel guests can go. It's in the membership community. Lopez: As a wholesaler, you're providing the wines to that facility? Dreimann: Yes. Ray: Correct. Takase: As I'm sure you folks are all aware now, liquor operates under a three-tier system: Manufacturer, Wholesaler and Retailer. Hualalai is the retailer as a Club license. Mr. Dreimann is going to be the Wholesaler. And we have manufacturers, the wineries. What happens many times, especially for wineries, they don't produce enough to be picked up by a big wholesaler such as Young's Market. You have to produce probably 20,000 cases to be considered by them for distribution. He's reaching to a niche market. They have a group of members there that can afford "better wines," but because there is a limited supply made, they will probably never be picked up by a local wholesaler or a national wholesaler to be sold. It keeps them from reaching the market now. We do have something called Direct Shipper Wine permits, where we go to these wineries and if you like that wine you can order from them; but it doesn't allow them to ship to another commercial entity such as the Hualalai Club. Hualalai is helping to provide him the space. He does have an operation similar to this in California. He's not new to the wine wholesaling business. He will be basically a wholesaler with exclusive clients. If he does well, maybe he will expand and sell off the premises and sell to the other clubs. Takaba: Do we have any other questions? Onizuka: As a wholesaler strictly for the Hualalai Resort, you're limited to just that group? Is this something the Department has confronted before? Takase: We haven't had a wholesaler with a limited clientele. As a wholesaler, you can determine clientele, who you will sell and won't sell to. The limitation is coming from where he's located at. He has an exclusive with Hualalai. They're providing him space and he will not become a commercial enterprise for the rest of the island sitting on the resort property. Maybe if he is very successful, he may choose to move it off the resort property and become a full -fledge wholesaler line servicing the rest of the island as well. There are no limitations on them. He doesn't have to sell to everybody, so right now he has the clientele of one. Takaba: What kind of inventory do you carry? How wide is your selection? Dreimann: In California, I carry an inventory of about three and a half million dollars. The average price is probably around in the area of $2,500/bottle. We have wines that are $50,000/bottle. We are world famous for providing wines that are hard to find, impossible to get, extremely highly rated, and on a very short supply. As our Wine Fund says, "that every time someone drinks a bottle, there's less left so therefore the JUNE 1, 2017 - LIQUOR COMMISSION MINUTES 15