C10 - Factors that Affect the Price of Wine (reviewed) Flashcards

1
Q

What are the seven broad brackets into which winemaking costs can be split?

A
Grape growing
Winemaking
Packaging
Transport, distribution and sales
Taxes
Retailers
Market forces
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2
Q

What are the costs associated with establishing a vineyard?

A

The land (especially in high-reputation regions)
Soil preparation
Cost of vines
Building the trellis

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3
Q

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

A

Labour
Cost can be managed -
relying on a seasonal, casual workforce or mechanisation
By growers sharing labour or machines (e.g., Bottling facilities)
Less possible in steep vineyards and some isolated sites

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4
Q

What are the most obvious costs involved in winemaking?

A

Equipping and maintaining the winery with necessary equipment

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5
Q

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

A

Time kept at the winery before release
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)

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6
Q

Which main aspects of packaging factor into the cost of wine?

A

Bottles, labels, capsules, closures and cartons (design and purchase)
Unusually shaped or heavy bottles are most costly
Can be reduced by bottling in the market where the wine is to be sold (only possible for large producers and not always permitted by local wine laws)

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7
Q

Describe the role of taxes in the cost of wine

A

Nearly every government taxes alcoholic drink
Tax levels vary wildly from country to country
This tax is seen as essential to controlling alcohol consumption by increasing retail price
The tax is an important source of government revenue

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8
Q

Describe the role of retailers in wine cost

A

Shops and generate will add money to the cost of wine so that they can make a profit

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9
Q

Why is wine generally more expensive in restaurants than shops?

A

Restaurants expect to generate more profit from wine

The price also reflects the occasion, the environment and the level/style of service

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10
Q

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

A

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

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11
Q

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

A

Where high demand exists for a product available in limited supply

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12
Q

Give a wine type, the price of which has suffered the effects of high demand and limited supply
Give an area where some vineyards have been unable to sustain themselves due to demand being too low

A

Bordeaux premium estate wines

Some steep vineyard Mosel sites

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13
Q

What are the three main types of wine producer?

A

Co-operatives
Merchants
Estates

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14
Q

What is a wine co-operative?

A

A wine business owned by its members; typically grape growers
Grower of co-operatives are guaranteed a buyer
Winemakers of a co-operative may not always have complete control over the quality of grapes supplied by their employers

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15
Q

Where are co-operatives most common?

A

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

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16
Q

Describe wine merchants’ roles

A

They buy grapes, juice or wine from growers or co-operatives
They have contracts with their suppliers so they often have more control over their source material than co-operatives
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

17
Q

On what scale do wine merchants operate?

A

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

18
Q

Where are wine merchants most common?

A

Outside of Europe

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

19
Q

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

A

Merchants (Negociant in France)

20
Q

Describe an ‘estate’ merchant

A

They make wine from only the grapes they grow
Small scale
Have the most control over the production process
Tend to have fewer blending options as they rely purely on their own crops
Fewer blending options is disadvantageous in years when growing conditions have been poor

21
Q

What is the french word sometimes used for estate?

A

Domaine