C10 - Factors that Affect the Price of Wine Flashcards Preview

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Flashcards in C10 - Factors that Affect the Price of Wine Deck (44):
1

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

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

2

What are the costs associated with establishing a vineyard?

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

3

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

Labour

4

How may the cost of labour be kept low?

By relying on a seasonal, casual workforce or mechanisation

5

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

By growers sharing labour or machines

6

Where are the money saving economies in vineyards less possible?

In steep vineyards and some isolated sites

7

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

Market forces

8

What are the most obvious costs involved in winemaking?

Equipping and maintaining the winery with necessary equipment

9

Give an example of winery equipment which can be shared (reducing costs)

Bottling facilities

10

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

Time kept at the winery before release

11

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

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)

12

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

Bottles, labels, capsules, closures and cartons (design and purchase)

13

What kind of packaging is more costly?

Unusually shaped or heavy bottles

14

How can packaging costs be reduced?

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

15

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

This is only possible for large producers
It is not always permitted by local wine laws

16

Describe the role of taxes in the cost of wine

Nearly every government taxes alcoholic drink
Tax levels vary wildly from country to country

17

What is the logic behind taxation of alcoholic beverages?

This tax is seen as essential to controlling alcohol consumption by increasing retail price
The tax is an important source of government revenue

18

Describe the role of retailers in wine cost

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

19

Why is wine generally more expensive in restaurants than shops?

Restaurants expect to generate more profit from wine
The price also reflects the occasion, the environment and the level/style of service

20

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

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

21

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

Where high demand exists for a product available in limited supply

22

Give a wine type, the price of which has suffered the effects of high demand and limited supply

Bordeaux premium estate wines

23

Give an example of an area where some vineyards have been unable to sustain themselves due to demand being too low

Some steep vineyard Mosel sites

24

What are the three main types of wine producer?

Co-operatives
Merchants
Estates

25

What is a wine co-operative?

A wine business owned by its members; typically grape growers

26

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

They are guaranteed a buyer

27

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

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

28

What quality can one expect from co-operative wineries?

Any (some produce the best wines of their area)

29

Where are co-operatives most common?

In europe

30

Why are co-operatives most common in europe?

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

31

Describe wine merchants' roles

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

32

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

They have contracts with their suppliers

33

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

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

34

On what scale do wine merchants operate?

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

35

Where are wine merchants most common?

Outside of Europe

36

Why are wine merchants more common outside of europe?

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

37

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

Merchants

38

What is the french name for wine merchants?

Negociant

39

Describe an 'estate' merchant

They make wine from only the grapes they grow

40

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

Estates

41

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

It gives the producer the most control over the production process

42

What is the big disadvantage for wine estates?

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

43

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

In years when growing conditions have been poor

44

What is the french word sometimes used for estate?

Domaine