Grape Growing/WM/Transportation/Importation Costs Flashcards
What are capital costs?
-money invested in a business to generate income
-acquiring, improving, maintaining long term assets eg land, buildings, equipment
What are operational costs?
day to day costs- producing and packaging
What is often the first cost for a prospective producer? (VY establishment)
-buying/renting the land
Why does the price of land vary?
-potential to produce high quality fruit
-name of appellation, eg Napa Valley vs Central Valley
-scarcity of land- land in prestigious regions eg Champagne rarely come up, when they do= highest bidder
-GIs- limited are of land
Once the land has been purchased, there are considerable costs that will need to be incurred before the vineyard can become operational. Give examples
- Surveying land- suitable for viticulture and deciding which grapes most suitable. eg satellite imaging and taking soil samples
- Site clearance- removing vegetation/rocks
- Building access roads into vy and between vy plots
- Buying and planting vines
- Drainage channels and pipework
- Irrigation- boreholes, reservois, laying pipes etc
- Protection against weather hazards
- Protection against pests
- Buying machinery and equipment
Capital costs are high, and not helped by the fact that…
Vines take 3 years for production
How can producers get access to funds for capital costs?
-loans- but interest and capital repayments
-investors= but share in profit and management of business
-some countries- gov encouraging establishment of vy- offer subsidies
Why does the amount of labour vary?
-size, topography
-eg. more labour needed in steep Mosel (no mechanisation) than flat Central Valley
-organic/bio- more labour intensive- additional procedures
-balance between labour costs and capital costs of machinery
-Chile- low labour cost= less incentive to buy machinery
-Coonawarra- high labour costs= investment in machinery better option
-Varies time of year. Harvest= team of unskilled pickers= cheap, but if shortage= choose highest offer
What are the costs of vineyard management?
-labour
-electricity
-insurance/depreciation
-machinery and fuel
-supplies
-water
vineyard treatment-conventional= agro chemicals-
-weather station= prevent fungal disease. If vy too small for weather station- need to pay for gov run station
-org/bio= traditional treatments (sulfur)
What are the winemaking costs?
-Grape growing/bought in fruit
- cost of bought in grapes vary according to quality of grapes, variety, vintage
-can blend cheaper alternatives to reduce cost
-Labour
-Machinery and equipment running costs
-Winery materials- eg sugar for enrichment, cultured yeasts, filtering/fining agents
- Water
Electricity- signif amounts use- some generate own electricity- solar panels
-Maturation
-Packaging- bottes, labels, pallets, bottling lines required= £, label designs
-Depreciation- replacement cost of equipment, cost of water, electricity, winery related depreciation= ‘cellar overheads’
What are the maturation costs in the winery?
-storage space
-vessels= expensive
-labour
-loss of cashflow- eg Brunello di Montalcino only released from the Jan 5 years after harvest
What are the 4 main ways of transportation?
Air
Rail
Road
Sea
What is the cost of air transportation heavily dependent on?
-weight= additional fuel
-bottles of wine way heavy in relation to size and value
When would one use air transportation?
-special circumstances- eg competitions/bojo nouveau- Japanese market
When is road transportation effiecient?
-short journeys, eg Epernay- Brussels
