Chapter 10: Factors that Affect the Price of Wine

Question 1

List all factors that affect wine price

Answer 1

Grape growing (land, equipment, labour)
Winemaking (equipment, return on profit i.e. storage of stock before selling)
Packaging (design and export)
Transport, distribution, sales (export vs. on site sale, distribution partner)
Taxes (alcohol tax)
Retailers (shops, restaurants)
Market forces (supply vs. demand, production costs)

Question 2

What is a co-operative?

Answer 2

• Common in Europe, less in the rest of the world
• Owned by members of a wine business, typically grape growers
• Growers are guaranteed a buyer for their grapes
• Challenging for winemaker who may not have complete control over grape quality
• Can produce best wine in the area
• Economical for small vineyards

Question 3

What is a merchant/negociant?

Answer 3

• Buy grapes, juice or wine from growers or co-ops
• Contractual
• Can have greater control over source material than co-op
• Can operate at small scale (premium) or large scale
• More common outside of Europe
• Many large wine brands made this way
• Popular for producers who only have to deal with a small number of growers

Question 4

What is an estate/Domaine?

Answer 4

• Make wine only from grapes they grow
• Usually small scale of production
• Greatest amount of control on production
• Usually best wines
• Fewer blending options: challenging in years with poor growing conditions