C10 - Factors that Affect the Price of Wine /checked

Question 1

What are the 6 broad brackets into which The Price of Wine can be split?

Answer 1

1. Production (Grape growing + Winemaking)
2. Packaging
3. Transport, distribution and sales
4. Taxes
5. Retailers margin
   6 Market forces

Question 2

What are the costs associated with establishing a vineyard? (4)

Answer 2

1. The land (especially in high-reputation regions)
2. Soil preparation
3. Cost of vines
4. Building the trellis (if)

Question 3

What is typically the largest production cost in an established vineyard?

Answer 3

Labour

Question 4

How may the cost of labour be kept low? (2)

Answer 4

1. Seasonal, casual workforce

2. Mechanisation

Question 5

How may labour costs be further reduced in an established vineyard?

Answer 5

Growers sharing labour or machines

Question 6

Where are the money saving economies in vineyards less possible?

Answer 6

In STEEP vineyards and some ISOLATED sites

Question 7

Other than practical considerations, what else may affect the price of grapes?

Answer 7

Market forces

Question 8

Other than cost of equipment, what else must be considered regarding cost of winemaking?

Answer 8

Time kept at the winery before release

Question 9

Why is time kept at the winery an important cost consideration in winemaking?

Answer 9

Storage facilities can be expensive to maintain
A lot of money is tied up in stock that cannot be sold to generate a profit straightaway (delay on sale is factored into the price of the wine)

Question 10

What kind of packaging is more costly?

Answer 10

Unusually shaped or heavy bottles

Everything out of the ordinary

Question 11

How can transportation costs be reduced?

Answer 11

By bottling in the market where the wine is to be sold

Question 12

Why is it not always possible to bottle at the intended market?

Answer 12

This is only possible for large producers

It is not always permitted by local wine laws

Question 13

Describe the role of taxes in the cost of wine

Answer 13

Nearly every government taxes alcoholic drink

Tax levels vary wildly from country to country

Question 14

What is the logic behind taxation of alcoholic beverages?

Answer 14

This tax is seen as essential to CONTROL ALCOHOL CONSUMPTION

The tax is an important REVENUE SOURCE

Question 15

Why is wine generally more expensive in restaurants than shops?

Answer 15

Provision of ENVIRONMENT and SERVICE

Question 16

What is the broadest/largest determiner of the cost of wine?

Answer 16

Market forces (how much the destination market is prepared to pay)

Question 17

Pertaining to market forces, when may the retail price of a wine far outweigh the costs?

Answer 17

Where high demand exists for a product available in limited supply

Question 18

Give a wine type, the prices of which have been driven up by high demand and limited supply

Answer 18

Bordeaux premium estate wines

Question 19

Give an example of an area where some vineyards have been unable to sustain themselves due to demand being too low (for the associated costs)

Answer 19

Some steep vineyard Mosel sites

Question 20

What are the 3 main types of wine producer?

Answer 20

1. Co-operatives
2. Merchants
3. Estates

Question 21

What is a wine co-operative?

Answer 21

A wine business OWNED BY MEMBERS; typically grape growers

Question 22

What is the major advantage for a grower of co-operatives?

Answer 22

They are guaranteed a buyer

Question 23

What is the potential large disadvantage for winemakers of a co-operative?

Answer 23

They may not always have complete control over the quality of grapes supplied by their employers

Question 24

What quality can one expect from co-operative wineries?

Answer 24

Any (some produce the best wines of their area)

Question 25

Where are co-operatives most common?

Answer 25

In Europe

Question 26

Why are co-operatives most common in europe?

Answer 26

Because vineyard holdings in Europe are on average too small to run economically

Question 27

Describe wine merchants’ roles

Answer 27

They buy grapes, juice or wine from growers or co-operatives

Question 28

Why do merchants often have more control over their source material than co-operatives?

Answer 28

They have contracts with their suppliers, but can reject grapes that are not up to standard.

Question 29

What challenge can wine merchants face with regard to grape supply? Under what circumstances is this applicable?

Answer 29

Producers may be more selective with grapes, but in areas where demand can outstrip supply, it can be difficult to guarantee a regular supply of grapes

Question 30

On what scale do wine merchants operate?

Answer 30

They can operate on small, premium wine production or operate on a large scale, producing different wines - or both

Question 31

Where are wine merchants most common?

Answer 31

Outside of Europe

Question 32

Why are wine merchants more common outside of Europe?

Answer 32

Average vineyard holdings are larger and producers have to deal with less growers

Question 33

Which type of wine producer is most common amongst many of the large wine brands?

Answer 33

Merchants

Question 34

What is the french name for wine merchants?

Answer 34

Negociant

Question 35

Describe an ‘estate’ merchant

Answer 35

They make wine from only the grapes they grow

Question 36

Which type of wine producer typically makes wine on the smallest scale?

Answer 36

Estates

Question 37

What is the result of wine estates producing on a small scale?

Answer 37

It gives the producer the most control over the production process

Question 38

What is the big disadvantage for wine estates?

Answer 38

They tend to have fewer blending options as they rely purely on their own crops

Question 39

When is it particularly disadvantageous for a wine producer to have fewer blending options?

Answer 39

In years when growing conditions have been poor

Question 40

What is the French word sometimes used for estate?

Answer 40

Domaine