It is bulk wine, produced by the local vineyards and barrel aged, but not bottled. It is just sold in bulk to these little stores (and restaurants and cafés) and you show up and just buy wine by the litre.
Some places require that you bring your own bottle, some provide a bottle. Most will let you taste what they have so you can choose. You will get good, solid wine (or they will be out of business with their customer base) and occasionally an excellent one.
The thing is, the wine is for drinking now. This is not “age it for five years” wine, it is good, table wine that is ready for this minute, tonight on your balcony, tomorrow out of the empty water bottle sitting on the edge of the canal, or Wednesday with a sandwich on the train to Roma.
This is how the Italians buy and drink their daily wine.
And so we paid €4,20 for our litre and a half of wine, since the three euro place was closed. We got a cabernet franc which was good, robust and dry.
A couple notes:
Below are photos and maps of just three of the many wine stores in Venice. It will get you started.
The best way to find them yourself is by exploring.
The second best way is by asking. For example, one of the three below I found because we were in a local bar, enjoying a glass of wine, and answering the bartender’s questions about California because she wants to visit.
So, as a return, I asked her where the local vino sfuso was.
“Dritto al supporto della pizza, gira a sinistra. (Straight to the pizza-by-the-slice, turn left. The key words to know are straight, left, pizza.)”
You can also try to Google the information, but this is, in my experience, the least helpful.
Here are three links: Florence, Venice, Venice.
Bonus fact: This same system is used all throughout Italy and France.
This post should be enough to get you started.