Examples of effect of scale production

Question 1

Chardonnay high volume (6400 tonnes), inexpensive wine

Answer 1

• huge volume
• small margin
  = keep price low
• investment in centrifugation, cross-flow-filter
  = maximise efficiency of production

= cost spread over a large production

Question 2

Cabernet Sauvignon low volume (65 tonnes), premium-super premium wine

Answer 2

• small volume
• high margin
  = higher the price
• equipment and storage
  = maximise quality

= cost spread over a small production

Question 3

Name a number of facts why the low volume, super premium wine is much more expensive?

Relate it to the work which had to be done.

Answer 3

1. ) pruning by hand
2. ) leaf/shoot removal
3. ) cover crops
4. ) disbudding
5. ) crop thinning
6. ) hand harvesting

overall a smaller vineyard

Question 4

which 2 types of cost are the most significant costs after the labour for a super premium wine?

Answer 4

1.) The real estate tax

= Value of the land

2. ) Depreciation of equipment
   e. g. Irrigation system, frost protection, trellising etc.