Business Monday

From vine to vendor: a peek at some businesses along the way

Patrick ‘Chip’ Cassidy at The Southern Wine and Spirits Beverage Management Center, which opened in 1999 on FIU’s Biscayne Bay in North Miami.
Patrick ‘Chip’ Cassidy at The Southern Wine and Spirits Beverage Management Center, which opened in 1999 on FIU’s Biscayne Bay in North Miami. MOHAMMAD QURESHI

Before Patrick “Chip” Cassidy became the go-to guy in South Florida for all things wine, he decided to learn the business from the ground up. As a teen growing up in New York, he developed a keen interest in wine after a friend’s father shared a bottle of Château Lafite 1959 with him, a vintage that today can set you back as much as $62,000.

Cassidy figured the only way he could sample wine like that on a regular basis was to buy and sell wine for a living. “I went into the wine business because I like to drink wine,” Cassidy is fond of saying. So, after getting back from Vietnam, where he served as an Army combat medic and won two Silver Stars and a Purple Heart, Cassidy started working at a liquor store in Freeport, New York. Part of the job entailed delivering liquor to customers who placed orders by telephone. In one instance he set out to deliver a bottle of J&B Scotch in a tenement where the elevator was out of order. He walked up three flights, carrying the bottle in a brown paper bag.

“So, I get off at the third floor, and all of a sudden out of the shadows steps this guy with a little .38 snub-nose revolver,” Cassidy says. “This is what he says to me: ‘Give me the bottle of J&B.’ He ordered it. He’s got the gun on me and he says, ‘Climb up the fire escape. You get up there, and if I hear you make one sound, I’m going to come up there and I’m going to blow your brains out.’ 

Cassidy handed over the bottle and roughly $4 in change that he had in his pocket and climbed up the fire escape. “I climbed over and I got onto the roof,” he continues. “I put down the top. And there was the pizza guy. True story. When the police came, they started really laughing.”

It just goes to show that the wine and liquor business “ain’t no place for sissies,” to steal a line from Bette Davis. But like art, the alcohol industry can serve as a primer about time and space, history and geography. Careers in the wine and spirits industry can take one all over the world, wherever wine or liquor is produced.

Cassidy ought to know. He has chronicled his visits to various wine destinations in two Wine Travels books (the proceeds of which he donates to the Sylvester Comprehensive Cancer Center and the Florida International University Chaplin School of Hospitality Management, where he has taught wine courses for the past three decades).

He has worked as the head sommelier at The Breakers Palm Beach and the wine buyer for Crown Wine & Spirits, and his work has taken him to five of the seven continents. The exceptions: Antarctica, which doesn’t produce any wine, and Asia, which only recently entered the wine market with some Chinese vintages, Cassidy says. Wine is a big business, not only throughout the United States, especially in California, but also in South America, with Chilean and Argentine wines, in Europe with French, Spanish and Italian wines, and in Australia and South Africa.

According to the Florida Department of Agriculture and Consumer Services, Florida has more than 40 wineries. But “most of the wine consumed in America is from California — about 70 percent is from California,” says Cassidy, who saw the market evolve during his 26 years as the buyer for Crown.

“Imported wines have been shrinking,” he says. “Consumption of alcohol in Europe is shrinking like crazy. The water was always bad. They didn’t have the purity that we take for granted. The wine was a substitute. There was plenty of that. They didn’t care how bad it tasted. For nearly 100 years, their workers would have it for lunch. It gave them energy. All that’s over with.”

The wine and spirits industry in the United States is a highly regulated — and often highly taxed — business. “After personal income tax, the largest tax revenue in the United States is wine and liquor,” Cassidy says, adding that Florida has one of the highest alcohol taxes in the country. “Only Alaska charges more tax on wine and liquor,” he says, explaining that for every three-liter bottle of wine sold in Florida, $2.25 goes toward state taxes.

When Franklin Delano Roosevelt ran for president in 1932, he vowed to abolish prohibition. During his first 100 days in office, Roosevelt ushered in a lot of legislation, including the 21st Amendment, which in addition to repealing the prohibition of alcohol also gave individual states the ability to determine the manner in which alcohol could be sold and served, says Robert F. Lewis, who, along with Louis J. Terminello, co-chairs the alcohol beverage group in the Miami office of Greenspoon Marder Law. Terminello also teaches alcoholic beverage law at FIU.

The amendment gave each state the power to oversee liquor sales within its borders, Terminello says, explaining that some states operate under a “control system,” where the sale of distilled spirits and wine takes place at state-run package stores or through designated agents. Currently there are 17 states that operate under the control system, they say; Florida is not one of them.

The United States uses a three-tier system to manufacture, distribute and sell alcoholic beverages, explained the Greenspoon Marder attorneys. “The ‘tied-house,’ where a retailer was tied to a particular house or supplier, stymied competition,” Terminello says. “You’ve heard the term ‘lock, stock, and barrel,’ ” adds Lewis. “It’s where you own the lock on the door, the stock, and the barrel it’s in.”

That type of an arrangement tended to foster mob activity during Prohibition, and the government wanted to limit the potential for intimidation tactics once the repeal took effect.

Today, the first tier involves producers and suppliers, including local favorite Schnebly Redland’s Winery of Homestead, which is also home to a brewery and the RedLander Restaurant, featuring chef Dewey LoSasso. Visitors can sample a variety of specialty wines, including those made from the avocado and lychee fruit, as well as craft beer. The first tier also includes vintners such as Mark A. Tobin, a partner at the Akerman law firm in Miami and the owner of Mattebella Vineyards in Long Island, New York, and importer Shaw-Ross International Importers of Miramar.

The second tier includes wholesalers and distributors, such as the privately owned Southern Wine & Spirits, which is headquartered in Miami and serves as the single largest distributor in the United States, with operations in 35 states and more than 14,500 employees. According to Forbes, it posted $11.9 billion in revenues last year. According to Cassidy, this is the tier responsible for collecting the liquor tax for the government.

The third tier comprises the various licensed retailers, including liquor stores, supermarkets and pharmacies that sell individual packaged bottles to consumers, as well as hotels, restaurants, bars and clubs that sell alcohol by the glass or bottle.

Florida operates under a quota system, where any county that allows the sale of liquor can issue one liquor license per every 7,500 people listed as living in that county by the U.S. Census Bureau. “It’s akin to taxi medallions,” Terminello says, adding that some liquor licenses can cost more than $500,000. “The smaller the county, the more limited the number of licenses, the higher the value.”

It’s difficult to determine exactly how many retailers there are: According to the website of the Florida Department of Business and Professional Regulation, the number of retail alcohol beverage licenses in Miami-Dade County is 14,554. For Broward it is 9,475. These licenses are for package stores, supermarkets, restaurants, and some of them are active, some are revoked.

Similar to the three branches of government, each tier is to remain independent of the others. That thwarts potential antitrust situations.

Florida has come a long way in the wine and liquor business, since Southern Wine & Spirits set up shop in the late 1960s. It was a time when white wine was for chicken and fish and red wines were for red meat. Today, Cassidy tells his class at FIU, red wine, such as the fruity Beaujolais from France, is a perfect pairing for the Thanksgiving turkey.

Guest speakers, such as wine and spirits broker Charles Rosenberg, who introduced the Grey Goose brand to South Florida, also weigh in on what wine goes best with what food. With the easy rapport and repartee that come from frequent sharing of ideas — and good wine — Cassidy and Rosenberg play off each other the way Frank Sinatra and Dean Martin might at a nightclub. Rosenberg makes his preference for reds over whites, irrespective of the food group. He even breaks the old taboo and drinks red wine with fish, lobster and stone crabs.

“I like red wines,” Rosenberg says. “I don’t waste my time on white wines. White wine’s for dancing; red wine’s for romancing.”

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