WINE & ECONOMICS


  • SUB-TOPICS Of WINE & ECONOMICS
    • Wine Trade
    • Wine & Business
    • Wine Buying
    • Wine & Marketing
    • Acquiring Grapes
    • Wine Distribution
    • Wine & Taxes
    • Wine & Politice
    • Wine & The Courts
    • Wine, Adulteration, Fraud, Scandel

WINE & TRADE

  • Wine Trade and Viticulture Spread South Down the Tigris River and Euphrates Rivers to the Larger Cities of the Earliest Civilizations of Babylon and Persia(Now Iran) and Became Center of Grape Growing World. Eventually Wine Spread to Egypt, Who Introduced Wine to Greece, Who Introduced Wine to Romans, Who Introduced Wine to Europe, Who Introduced Wine Throughout the Modern New World.
  • Noble Grapes Follow the Ancient Wine Route and Form the Foundation For What Grapes Crossed and Why They Did. The Wine Route and Wine Trade Also Influenced the Wines Styles Over Time.

Wine & Trade is the Transfer of Wine, Cuttings and Culture.

ANCIENT ROUTES

  • Caucasus to Egypt
  • Caucasus to Greece
  • Caucasus to Mesopotamia

GREEK DISPERSAL

  • Greece to Sicily
  • Greece to Italy
  • Greece to Northern Africa

ROMAN DIFFUSION

  • Rome to France(Atlantic)
  • Rome to France(Mediterranean)
  • Rome to Germany
  • Rome to East Europe

LATER EXPANSION

  • Spain to Mexico/ California
  • Spain to Chile
  • Portugal to Brazil
  • Spain to Argentina
  •             to Australia

SILK ROAD Road Connecting a Chain of Cross-Roads That Connected “The East (China, India, Persia, Arabia) With “The West” (Mediterranean, Roman Empire, Armenia). The World First Major Intercontinental Trade Route Connected Merchants, Traders, Pilgrims, Monks and Wanderers.

  • History- The Beginnings of the Silk Road Are Believed Started 1000 BCE., and Reached It Height Before and During the Roman Empire.
  • One of the Economic Benefits of the Silk Road Was That Traded Spices and Botanical Become Available and Less Expensive For Everyone Not Just the Royal, Rich and Upper-Class.

GLOBALIZATION Of The VINE The Expansion of the Vine, Wine and Brands Across Nations and Continents. This Globalization has Been Accelerated In the 1900’s With the Advancement of Air Travel and Ease of Information Via the Internet.

  • More Than 33% of Wine Consumed Globally is Produced In Another Country. Europe’s Once Dominated the Global Wine Trade But Now is Slowly Being Reduced Due to the Emergence of New World Countries and the Continued Focus On Quality From Emerging Old World Wine Producing Countries.
  • INFLUENCES ON TRADE
  • TRADE AND POLITICS
  • TRADE EMBARGOES OVER TIME
  • WINE TRADE EVENTS OF THE WORLD
    • Vinitaly @Verona April
    • Wine & Spirit Whole Sellers of America

The ECONOMY Of WINE

  • ADVANTAGES
    • Weak Currency In a Country Can Attract Tourist From Nearby Countries to Get a “VIP On a Budget” Experience.
  • CHALLENGES
    • The Weakness of a Country’s Currency Makes It Difficult to Import Materials Such as French/ American Oak.
    • Wine Producers Need to Increase Prices to Maintain Profitability.

WINE & The MARKETS THROUGHOUT HISTORY

ROMAN EMPIRE- 510 BC. – 476

  • Europe at the Time Was the Center of a Vast Market and Trade For Wine. The Mediterranean Sea Was the Highway Through Which Wine Was Distributed Throughout.  The Outlining Regions and Counties Around Europe and the Mediterranean Sea Had What Seem to Be an Endless Thirst For Wine and Rome and Its Land and Organization Where Willing and Able to Satisfy This Need For Wine Throughout Its Empire.
  • Instead of Shipping Wine Around Their Empire the Romans Began to Start Growing Wine In Outlining Areas Where it Wasn’t Feasible to Ship Wine. Wine Wasn’t Best For Long Distant Shipping and the Cost to Ship the Wine Wasn’t Economical.  This Started the Areas of Bordeaux, Burgundy, the Rhine and Rhone Valley and as Far Away as Germany and Hungary to Start to Grow Grapes and Produce Their Own Wine or In Some Cases Increase the Quality of Grapes They Produced by Using Better Viticulture Techniques.

MIDDLE AGES-  476 – 1453

  • With the Fall of the Roman Empire Wine and the Wine Trade Become More and More Regionalized and Localized.  Most of the Prevalent Paths of Wine Trade Broke Down Altogether.  The Period of the Middle Ages and the Sub-Period of the Dark Ages Where Dark Endeed With Vineyards Being Destroyed or Disappearing Altogether.  In the Areas Where Vineyards Still Existed the Leader In Charged Made Sure to Protect the Vineyards From Barbarian Invaders and In Many Cases Enacted Laws That Where Punishable With Death to People Who Stole Grapes or Damaged the Vineyards.

THE RENAISSANCE- 1300 – 1900


WINE & BUSINESS

LABOR & WINE

SOURCING LABOR

  • Full Time, Rent, Hire, Contract Labor
  • There Are Companies That Manage the Provisions of Labor.

BI-HEMISPHERE, NOMAD HARVESTER LIFE

  • Viticulture Workers Who Works the Harvest for 3 Months In a Country/ Wine Region, Travel for 3 Months to Another Hemisphere and Work That Country/ Wine Regions Harvest For 3 Months and Travels For 3 Months to the Other Hemisphere to Repeat the Process Again. These Workers Are Coveted In the Wine Labor Force For Their Ongoing Accumulation of Wine Knowledge and Their Ability to Live a Nomad Lifestyle.

WINE BUYING

  • Picking Out a Wine Can Be Difficult and Intimidation. Knowing the Reputation of a Brand, Producer or Appellation Can be a Great Indication as the Quality and Style of the Wine. Think of the AOC./ DOC. etc. as a Anti-Fraud System For the Wine Industry.” A AOC./ DOC. etc. is a Promise to Deliver On a Certain Set of Attributes and a Reputation of Quality.
  • When I’m Selecting a Wine For a Customer I Will Match the Flavor Request With a Name, Label, Pedigree, History or Back-Story Behind the Bottle. This is So It’s Not Just Me Promoting the Wine, There’re Others In the Wine World Giving the Buyer Piece of Mind and Conviction In Their Purchase. (Unless the Buying is Looking for Something “Obscure”.
  • When I’m Buying Wine For Myself I Want Bottles From Obscure Appellation From Producers I Don’t Know. I’m Constantly Pushing My Plate to Achieve a Greater Understanding of the Wine World.

Grapes Are Grown to Be Produced Into Wine, Wine is Produced to Be Consumed and Enjoyed.

  • CONSUMER BUYING PATTERNS THROUGHOUT HISTORY
    • Wine Was Asked For and Drunk by Whatever the Person Made/  Modern Day Georgia.
    • Wine Was Asked For and Drunk by Whatever Was Around.
    • Wine Was Asked For and Drunk by Region   Ancient Rome, 500 BC. to 500.
    • Wine Was Asked For and Drunk by Village/ Europe, 500’s.
    • Wine Was Asked For and Dunk by Clos/ Vineyard/ Burgundy, 1350’s
    • Wine Was Asked For and Drunk by Style/ America, 1960’s.
    • Wine Was Asked For and Drunk by Brand / America/ The World, 1970’s
    • Wine Was Asked For and Drunk by Varietal/   America 1960’s.
    • Wine Was Asked For and Drunk by Producer/ The World 1970’s
    • Wine Was Asked For and Drunk by Wine Rating/  The World, 1990’s.
    • Wine Was Asked For and Drunk by Appellation/ France, 1930’s.
    • Wine Was Asked For and Drunk by Single Vineyard/ The World, 2000’s.
    • Wine Is Asked For and Drunk by What Influences Say On Instagram/ The World Currently.

Some Wines Are Just About Packaging, Price and Distribution.

WINE & PRICRE

  • WHY SOME WINE BOTTLES ARE SO EXPENSIVE
    • United Production
    • Difficulty to Harvest
    • Aging Time
    • Branding
    • Price of Real Estate
    • Appellation Pedigree
  • Premium, Volume, EconomySecond Label

There is Nothing Wrong With Ordering What Wine You Like.

WINE & QUALITY

Quality-Price-Ration- Rating a Wine Based On the Ratio of its Quality Compared to Its Price.

  • The Higher the Quality and the Less Expensive the Wine is the Better the Ratio and Better Perceived Value. While the Quality-to-Price-Ratio is Subjective, it Can Be Put Into a Formula. Quality Divided by Price, If a Bottle Cost $10 and Taste Like a $25 Bottle its QPR. is 2.5. Most Bottles of Wine Must Pass Two Test: Quality and Price.

WINE & VALUE

  • OPPORTUNITIES To GET VALUE
    • Lesser Growths In Great Vintages…Bordeaux 2009, 2010
    • Buy Lessor Wines of Great Vintages…Bordeaux 2000, 2005, 2009, 2010
    • Best Regions From Lesson Known Countries
  • WINE & PHILOSOPHY?  Is a Wine Better When It’s More Expensive?”
    • There Are Many Factors and Tangents That Go Into the Price of a Bottle of Wine. The Limited Amount/ Supply of the Wine, the Difficulty of Harvesting(Mountain Vineyards Compared to Machine Harvested Flat Vineyards), Price of Real Estate  the Branding Costs and Elevage Time All Can Lead to Elevated Prices.

WINE &INVESTING COLLECTING

  • WINE COLLECTOR- Someone Who Buys Wine For Thrill of Acquisition and Cellaring Rather Than Consumption of Wine.
  • WINE INVESTMENT- Acquisition of Wine For Profit/ Gain, as Means of Making Money or Financing Combustion or Combination of Both.
    • Holding Wine In Hope of Increases In Value as it Ages.
  • CULT WINE-(USA.) High Quality, High Cost, Limited Production, or Popular In Public Wine Sought After by Collectors of the World.
    • Cabernet Sauvignon of Napa and Bordeaux Are Leaders
  • CELLAR DEFENDER- Bottles of Wine Bought Usually On Discount That You Enjoy Drinking and Can Rely On to Drink When Your Prized Wine Is Aging, Thus Killing Your Temptation to Consume the Good Wine.

PLACES To BUY WINE

  • PLACES TO BUY WINE
    • Wine Shop
    • Supermarket
    • Wine Bar
    • Winery
    • Wine Club
    • Auction
    • Restaurant
    • On Line

WINE SHOP Stand Along Wine Merchant, Carrying Predominately Wine.

  • Wine Shops Generally Posses the Best Variety of Wines Around the World.
  • Getting Friendly With Your Local Wine Shop Owner Is a Great Idea. These Owner Are Great and Love to Build Customer Relationship and Over Time a Good One Can Get to Know Your Palate.

SUPERMARKET A Large Self-Service Store Selling Food, Household Good and Wine.

  • While Not Having the Selection of a Wine Shop Supermarkets Have a Good Collection of Wines That Are Popular and East to Find.
  • Shelf Talker- A Sign Often Small and Laminated and Attached to the Front of the Wine Shelf.  These Shelf Takers Are Designed to Gain Attention of the Potential Buying.  Generally These Talker State Wine Qualities and What to Expect Since Your Can’t Try Any.
  • DEMYSTIFYING PROCEDURE~  ~For Best Value Buy Your Wine Bottles at a Supermarkets.~
    • Economically These Best Places to Buy Wine is at Your Big Chain Supermarket: Vons/ Ralphs.  Besides Having Good Prices, Every 3 Months They Have 30% of All Wine.  Plus if You Buy 6 You Earn an Extra 10$.

WINERY A Building or Property That Produces Wine.

RESTAURANT A Place Where People Pay to Sit and East Meals That Are Cooked and Served On the Premises.

  • Restaurants Are the Worst Place to Buy Wine, the Mark Up is Considerable.  But the Best Place to Pair Wine With Food  In a Good Environment.
  • THE WINE LIST- Used Prodominatly In Restaurants and Wine Bars.
    • The Wine List is an Opportunity to Drive Business and is a Effective Sales Tool.
    • Wine Lists Should Be  Layed Out and Organized In Strategic Manner.
    • Wine List Should Be Formatted Correctly and Free of Errors.
    • Must Have Reasonable Price Increments.
    • Descriptions Should Describe Differences.
    • Descriptions Should Be Insightful.
    • Description Should Be Food-Focused.
  • CONTENTIOUS WINE ISSUE!  It’s Fair For Restaurants to Mark-Up Their Wine So Drastically!
    • NOThe Mark-Up On Wine (Up to 500%) is Ridiculous, and On Some Level It’s a Major Detractor For Me to Go Out and Drink Great Wine In Restaurants.
    • YESRestaurant Which Have Wine Programs Also Have People Making the Entire Operation Go. Hosts In the Front Seeing You to Your Tables, Food Preps In the Back, Cooks In the Kitchen, Dishwashers, Polishes Making Sure Not Spots Remain On Your Wine Glasses. Bartenders and Sommelier’s Making Your Drinks and Pouring Your Wine. The Nicer the Place You Want to Drink Your Wine the More Expensive the Rent is. The List of Things That Need to Go Right On Behind the Scenes So You Can Sit In Peace and Smell and Taste Your Wine is Endless.

WINE BAR A Bar Often With a Limited Food Service Where Wine is the Main Alcohol Sold.

  • A Bar With Typically a Certain List of Wines Being Poured.  Wine Bar Typically Displays the Wines Being Poured by the Glass and by the Bottle.  Prices Usually Range From $10 to $30 Per Glass.
  • Wine Bars Generally Have Different Wines of the World, Where a Tasting Room Generally Offers Wines by a Certain Producer.

WINE CLUB Wine Membership or “Clubs” Are Designed to Provide Customers With a Series of Bottles Either In Monthly or Quarterly Installments. These Clubs Either Provide Members With Wines They Would Otherwise Have to Go Search For In the Retail Market or Wines That They Couldn’t Get Otherwise. Wine Clubs Are Usually Themed or Provide Red or White Wine or a Mixture of the Two.

  • Before Joining a Wine Club Think About What Am I Going to Get Out of Wine-Club Membership, Not What is It Going to Give Me.
  • REASONS WHY JOIN A WINE CLUB
    • Limited Bottles Produced
    • Exclusive Release
    • Not Into Shopping or Searching For Wine
    • Wine-Club Member Event
    • You Live Too Far Away
  • REASONS WHY NOT TO JOIN A WINE CLUB
    • It’s a Common Wine You Can Buy Cheaper at the Supermarket
    • Longterm/ Short-Term Commitment
    • They Have Credit Card Information

BRAND LOYALTY- Tendency of Consumers to Continue Buying  the Same Wine Brand Rather Than Buy Competing Brands.

WINE DELIVERY- Usually Wine Clubs or Wineries That Delivery Their Wines to Consumers Have What Are Referred to as Shipping Windows.  In an Effort to Avoid the Intense Heat of the Summer Producers Will Make an Effort to Ship Their Wines In Months That Are Not Hot.  This Will Midigate the Possibliley of Wine Being Exposed to Over Heated Warehouses or Conditions That Might Effect the Wine In an Negative Way.

AUCTION HOUSES

  • HISTORY- Since Roman Times Wine Shipped to Final Destination Was Often Auctioned Off In Port at Arrival.
  • Wine at Auction Was a Means to Sell Young Wine In Barrels, Today the Bottles of Wines Sold at Auction Are Usually of Maturity or Rarity.
  • Wine Was Auctioned Off by Name of the Country, Region, Village, or Vintage. Over Time Certain Country’s Reputations Preceded Them and Commanded Greater Attention and Higher Prices.
  • As the Wine Trade Became More Competitive and Improvements In Communication and Transportation Across the World the Need For Producers to Auction Off Wine Diminished.
  • France, Belgium, Holland, Australia, Japan, Switzerland All Have Active Auction Houses.
  • Wine is Sold by Auctioneer Acting as a Agent For the Seller, or as the Seller In His Own Right.
  • Brokers/ Courtiers- Middle Man Between Wine Grower and Wine Merchant/ Negociant.
  • ~Micheal Broadbent~ “England”, Master of Wine, Wine Critic, Author, Auctioneer.
  • AUCTIONS HOUSES WITH WINE DEPARTMENTS
    • Christie’s
    • Zachary’s,
    • Sotheby’s
    • Ancher Merall & Condit.

Some Wines Are Just About Packaging, Price and Distribution.

  • MOST COVETED BOTTLES AT MODERN WINE DAY AUCTIONS
    • Pre-Phylloxera French Clarets
    • Large Format Old Vintages
    • Old Vintages of “First Growth
    • Limited Production Napa Mountain Appellation
    • Specific Vintage- Pre 1900’s, ’20, ’26’, ’28, ’29, ’45, ’47, ’49, ’53, ’59, ’61,’82,’ 90,’00
  • WINE & PHILOSOPHY?   Is is Better to Buy Wine From a Private Customer or to Buy Wine From a “Big Room/ Auction House”?”
    • This Can Be Tricky, When You Buy From a Private Customer You Can Go to Their Cellar, See and Feel the Conditions That the Bottles Are Kept and Get a Great Idea of How the Wine Are Cared For.  With a Auction House All of That Insight is Gone and You Are Left With the Seller Word and the Buyer Intuition.

CHARITY AUCTIONS Wine Producers Selling to Wine Lovers and Merchants.  Some Auctions Are For Charity and Some For Profit.

  • ~Hospices de Beaune~
    • Wines From the Vines of the Vineyards of the Hospice of Beaune, Wine Sold by Barrel Under the  Names of the Benefactor to the Hospital Over the Last 500 Years.
  • ~Auction Napa Valley~
    • Generous Napa Valley Wine Makers Auction Off “One of a Kind” Wines to Benefit Great Causes Like Community Health and Children’s Education Nonprofit Services.
  • ~Napa Valley Vintners~
  • ~Sonoma County Wine Auction~
  • ~Classic Wines Auction/ Portland~
  • ~Rusty Staub Foundation Wine Auction~
  • ~Auction of Washington Wines~
  • ~Willamette Pinot Noir Auction~ (April/ Newberg)
  • ~German Wines Auctions~ (Greater Germany)

WINE FUTURES Agreeing to Buy Wine On Delivery at a Specific Date In the Future. Buying Wine Futures Are Done Prior to Harvest That Year and Can Be Up to 2 Harvests Prior. Wine Futures Are Generally Associated With Burgundy and Bordeaux But High-End Producers In Napa Using the Practice.

  • En Primeur– Bordeaux Wine Producers Hold an Annual Event “En Primeur” In Which the New Seasons Wines Are Tasted by Influential Journalists and Wine Critics of the Wine World. The Attendees are There to Judge the Wines and Set the Price of the Wine Futures For Purchase From Wine Merchants.

SELLING WINE

LUXURY WINE Any Wine That’s Desirable and More Than Necessary and Ordinary.

  • A Special Bottle That You Are Buying For a Special Occasion.
  • Fluctuation In Wealth and Currency Are Factors In Luxury Price Setting and Supply and Demand.
  • LUXURY WINE PRICE CONTINUUM
    • Affordable- Luxury Wine $50- $99
    • Luxury- Wine $100-$499
    • Iconic- Luxury Wine $500-$999
    • Dream- Luxury Wine $1000+

One Should Never Sell Wine Off Your Own Palate, Nor Should One Sell From Your Wallet.

FINE WINE- Term Reserved For Exceptional Wines From the World’s Best Vineyards In Esteemed Regions, High Quality Grapes or Produced by Acclaimed Winemakers. These Wines Usually are “In Vogue”, In Higher Demand or Possess a Propensity to Ages.

  • With Cork and Bottle Coming of Age In Late 1700’s, Wine Became Capable of Aging, Fully Maturing, thus Transcending Wine Quality Forever From a Short Term Commodity to ”Fine Wine”. A Increasingly Specialized, Sophisticated, International Market Attracting Admirers, Connoisseur, Collectors and Investors Have Been Developed Because of This.

ACQUIRING GRAPES

GROWING YOUR OWN GRAPES

SOURCING/ BUYING GRAPES– Getting Grapes Straight From the Source of a Vineyard.  For People Who Wants to Make Wine But Done Own a Vineyard.

BULK WINE Wine That Has Not Been Put Into Smaller Containers. or Wine Shipped In Larger Containers Rather Than In Bottles or Smaller Packaging. Bulk Wine Can Be Shipped In Large Containers Then Repackaged at its destination Destination.

  • HISTORY- Bulk-Wine is a Term Used For Wine Being Transported Between Producer and Bottler or Wine That’s In Transport Between Continents or Hemispheres. A Lot of Cheap Producers Buy Bulk to Put Bottle and Market For Them Selves. (Bulk Wine Producers Shoulder All of the Diverse Production Cost.) The End Resulting Wine is Anonymous and Just Needs to Be Passable to the Blind, Tasteless Economy Driven Market, How it Taste Doesn’t Matter.
  • WHY BULK WINE? Buyers of Bulk Wine- Wineries, Importers, Exporters, Bottling Facilities Retail Stores/ Supermarkets- Sell Their Private Labels.
    • Buyers
      • Need to Create a Blend Using a Varietal That’s Not Available Locally
      • Need For Wine Because of a Bad Vintage
      • Need For Wine For a Private Label
      • Private Wine Labels, Home Brand, Store Brand, Retailer Brands-  Brands That Are Owned By the Retailer or the Distributor and Sold Only In Its Own Outlets.  Most of the Time These Private Wine Labels Ect Don’t Own Vineyards or Wineries and Buy Bulk Wine and Sell the Wine as Anonymous Under Their Labels.
      • San Francisco is Hub of Bulk Wine Business. Domestically Its In Middle of California Market and Internationally is an Important Entry Into Port United States Import Market of Bulk Wine.
    • Sellers
      • Excess Wine That They Can’t Use Themselves
      • Buyers Fail to Make Payment
  • BULK WINE Is TYPICALLY TRADED IN USA. IN ONE OF 3 WAYS…
    • Tier One… Negotiants/ Brokers…Offering Services In
      • Grape and Bulk Wine Brokerage
      • Global Bulk Wine Trading
      • Evaluation and strategic Strategic Branding
      • Important Brokers
        • Torrentine Brokerage
        • Ciatti Company
        • Mancuso Wine Brokerage
    • Tier Two… Wine Industry Classifieds…These Classifieds Appear In Newspapers, Industry Publication or Online. These List Available Bulk Grapes, or the Specification of Ready-Made Wines. Potential Buyers Then Contact the Suppliers Directly, Where They Can Negotiate On Grapes and Bulk Wine Listings.
      • Important Classifieds
        • Winebusiness.com Vinex
        • Wine Country Classifieds Vinsen VRAC.
    • Tier Three… Know as the Whisper Market…Trade is Conducted by Personal Relationships. Wine Isn’t Listed Anywhere and Transactional Data Isn’t Publicly Available. This Market Accounts For a Large Part of the Bulk Wine Trade. Wineries Sometimes Use Tier Three “Whisper Market”, and Trust Brokers Will Sell Bulk Wine Discreetly, Without Revealing Where it Came From.
  • FESTIVALS~ ~International Bulk Wine and Spirits Show~ IBWSS. (July/ San Francisco)
    • Gives Buyers and Sellers Access to Each Other In the Bulk Market For Both Short Term and Long Term Opportunities. The IBWSS. Also Holds Education and Informational Seminars On Important Issues.

GRAPE PURCHASE AGREEMENT
A Contract Between and Grape Grower and Wine Producer to Buy Future Harvest.

  • Contract Can Be For One Harvest or Multiple, Most Are 3-5 Years.
  • Planting Contracts Usually Are For 10 Years.
  • Grape Purchase Agreements Allow the Fine Tuning  of Vineyard Contracts Based On Specific Viticultural Wants and Needs In the Vineyards.
  • Contract Usually Has Two Parts.
    • Grape Component
    • Legal Component
      • Identification of Grapes Subject to Contract -Terms of Contract
      • Price and Payment
      • Delivery and Acceptance
      • Grape Quality
      • Remedies and Dispute Resolution
  • WINE & PHILOSOPHY?   Does/ Should a Wine Maker and Grape Grower Need to Communicate During the Growing Season to Produce the Correct Style and Best Wine Possible?”
    • The Grower/ Wine Producer Need to Be “In Sink” When It Comes to Prunning, Yields and Brix Levels at Harvest.

WINE & MARKETING

MARKETING Advertising or Promotion, But Also Can Other Activities Such as Product Development, Pricing, and Distribution. The Market is a Complexed of Relationships Between  the Wine Producers and Consuming Public.

  • MARKETING YOUR VINEYARD- Before You Plant a Vineyard Think About Your Potential Market and Some Questions Should Be Addressed.
    • Who’s Going to Buy Your Wine?
    • What Wine Do They Want?
    • Where Do They Want it?
    • What Are They Going to Pay for it.

MARKETING TO CUSTOMERS

  • Wine Was Referred to In Generic Terms Such as Champagne, Chianti, Sack, Hock, Claret, Port, etc. With No Importance to Place or Grape. You Trusted Your Wine Merchant or Supplier. As Centuries Go by a Greater Interest Has Evolved and Wine Begins to Be Referred to by Country or Region. In Modern Time Specific Villages Now…….
  • History- Did the Wine Producers Hundreds of Years Ago Have a Marketing Plan.  How Did a Producer In France Decide Which Types or Grape or Styles of Wine to Exported to  Which Country. Maybe The Taste of the People Drinking Wine In the Baltac Sea Country Where Different Than the Consumer In England.
    • Was There a Quality Systems Back Then?  Who Decided Which Wines Where Going to the Kings and Queens and Which Wine Goes to the Masses.

WINES EFFECTS ON MARKETS

  • Wine Trends and Economy Are Effected and Have a Reflection as to What Varieties Are Planted In the Ground and What Wines and Styles Are On the Wine Shop Selves.

It’s Less Expensive to Keep a Customer Than it is to Aquire a New Customer.

  • PROMOTING
    • Who
    • To Whom
    • How
    • Why Do We as Consumers Pick the Bottles We Do On the Wine Shelve.?
  • PACKAGING
    • Classic Wood Box
    • Wine Box
    • Shippers
  • LABELS
    • Labels Are a First Impression and Can Resonate to Certain Customers
    • **Refer to “CONTAINERS/ Labels  For Detailed  Information
  • LOGISTICS
    • Direct to Customer Shipments

DECLASSIFYING GRAPES/ WINE

Producers, Sometimes High-Profile Producers Can’t or Don’t Want to Use There Name or Estate or Appellation Name Because of a Country or Areas Wine Law. As a Result the Producer Will Set a Certain Wine or Portion of Wine Aside.  This Wine Will Be Labeled the Lower Denomination, and Sold Accordingly.

  • RESONS FOR DECLASSIFIING WINE
    • Vineyards Yields Exceeds the Laws Allowance
    • Wine Has Not Spent the Required Amount of Time Aging/ In Barrel
  • WINE & PHILOSOPHY?  Is it Good That Winemakers Are Declassifying Their Wines and Placing Them In a Lessor Wine Category?”
    • Many Wine Producers, (Especially In France) Risk Losing Their Appellation Produced Wine Status Because of the Minimally Invasive Wine Making Techniques Followed In Natural Wine Making. These Producers Are Instead Turning to the Vin de Table, Vin de Pays or Equivalents In Order to Get Out of the Constraints of Conventional Appellation Viticulture.
  • WINE & PHILOSOPHY?  Does a Wine Region Need Its Own “Wine Identity”/ “Flag-Ship” Grape/ Varietal Flag or a Specific Wine That Stands Out On the World Market for a Region to be Successful?”
    • While It’s Not Completely Necessary For a Wine Region to Have a Certain Grape That Stands Out is Helpful to the Region For Marketing and Identity In an Overly Saturated Wine World.
  • CONTENTIOUS WINE ISSUE!  A Wine Costing $50 and a Wine Costing $150 Made From the Same Grapes From the Same Vineyard or Growing Area Should Not Have Such a Dramatic Price Range!”
    • YESGrapes Grown and Produces Using the Same Grapes, Methods and Means of Production Should Cost the Same.
    • NOHowever or How Much the Winery or Wine Producers Want to Charge Its Customers is Up to Them.  If the WineryBrands and Market a Wine as a Higher Quality and Value and Chargers 3 Types as Much For the Same Wine is Up to Them and if the Stupid or Less Informed Customer Falls For the Marketing Its On Them.

The THREE TIER DISTRIBUTION SYSTEM

  • WINE PRODUCERS…Wineries
  • DISTRIBUTOR….Wholesales/ Retails
  • RETAILER…Liquor Stores/ Restaurants

The Three Tier Distribution System Goes Back to the Repeal of Prohibiton In the United States In 1933.  The Individual States Were Put In Charge of the Laws Around Distribution of Alcohol. The Government Was/ In Mostly Concerned With the Collection of Taxes. Most States Have Outlawed the Ownership of the Entire Chain of Distribution to Make Sure There are Clear Demarcation Points Where They Ca Collect Taxes.

WINE PRODUCERS

  • The Production of the Product Happens Here and Ends With the Cases or Wine Being Placed On a Loading Dock, At Which the Ownership Changes to the Distributor.
  • Typical Margins Are 40%

WINE IMPORTERS

Licensed and Authorized “Agent” to Import Wine Into United States From Foreign Countries.  Part of the Three-Tier System Which is the Law In Most States. The Importer is Licensed and Authorized to Bring Wine Into the United States From the Manufacturer’s Foreign Country In the Course of Trade.

  • GENERAL INFORMATION ON WINE IMPORTING
    • Legally to Import Wine the Importer Needs to Obtain a Lecense On the Federal Level, but a License In Not Needed On the State Level.
    • Often There is Multiple Importer of the Same Wine Into the Country.  These Importers Might Have Different Regions That They Import to.
  • LEADING WINE IMPORTERS
    • Adventures In Wine
    • Beaune Imports (Berkley)
    • Epic Wines and Spirits
    • Estate Wine
    • JVS Wines Imports
    • Kermit Lynch Wine Merchant (Berkley)
      • PIONEERS– ~Kermit Lynch~ Wine Importer Whos Name Has Become Synonymous With the Import of French and Italian Wines In the 1970’s.  He Opened His Business ”Kermit Lynch Wine Merchant” In Berkeley and Become a Leading Retailer, distributor and National Importer For “Authentic Wines That Express Their Terroir.”  He Purchased Domaine Les Palieres In Gigondas In 1998.  Kermit Also Has Authored 3 Books.
    • Kobrand
    • Louis/ Dressner
    • Maisons Marques & Domaines (Oakland)…30 Wineries/ 6 Countries
    • North Berkeley Imports (Berkley)…110 Wineries/ 2 Countries
    • Old Bridge Cellars
    • Opici
    • Pasternak Wine Imports (New York)
    • Quintessential Wine Importers (Napa)
    • Rinascimento
    • Rosenthal Wine Merchant (New York/ New York)
    • Skurnik Wines (New York)…178 Wineries/ 12 Countries
    • Soil Expedition Co. (San Francisco)
    • USA Wines West
    • Vine Street imports (Pennsylvania)
    • Vintus (New York)…40 Wineries/ 10- Countries
    • Vitis Imports
    • Winebow Inc. (New York)…199 Wineries/ 14 Countries
    • Winesellers (Illinois)…70 Wineries/ 12 Countries
    • Wine Warehouse

WINE DISTRIBUTORS

  • Wine Distributors Sell Wine to Retailers Around the Country/ World.  The Retailer Buying the Wine Has to Possess a Liquor License Prior to Purchase. Liquor Laws Vary by State and Distributors Are State by State Also. Some Counties Take the Role of Distributor and Pay Booth the Taxes and Take the Margins Made On the Wine.
  • INTERSTATE SHIPPIN LAWS
  • Dragging the Bag–  This is a Term Used For Wine Distributors Who Go Around to Retail Outlets and Establishments In an Effort to Get Them to Buy Their Wine From There Wine Portfolio and In Turn Sell to There Customers.
  • TOP 10 LEADING WINE IMPORTERS  **Done by Wine Business Monthly…2020
    • #1 SOUTHERN GLAZER’S WINE & SPIRIT
    • #2 YOUNG’S MARKET CO.
    • #3 BREAKTHRU BEVERAGE GROUP
    • #4 JOHNSON BROTHERS LIQUOR CO.
    • #5 WINEBOW GROUP
    • #6 EMPIRE DISTRIBUTORS
    • #7 OPICI FAMILY DISTRIBUTING
    • #8 HEIDELBERG DISTRIBUTING CO.
    • #9 WINE WAREHOUSE
    • #10 MARTIGNETTI COMPANIES
  • OTHER WINE IMPORTERS
    • Diamond Importers- Specializes In… Greek Wine
    • Henry Wine Group-
    • Loosen Bros.- Specializes In… German Wine
    • Monika Caha Selections- Specializes In… Austrian Wine
    • North Berkeley Imports- Specializes In… Burgundy, Italy
    • Old Bridge Cellars-  Specializes In… Australian Wine
    • Ole & Obrigado- Specializes In… Spainish Wine
    • Regal Wine Company-
    • Skurnik Wine- Specializes In… Italy Wine
    • Vintus-  Specializes In… Northern Rhone, Italy
    • Wine Bridge-

RETAILER

  • The Retailer is the Physical Location For the Wine Purchase.  They Hold Inventory and Most Likely Have a Trained Staff to Sell the Wine.
  • Typical Margins Are 40%

RESTAURANT– Beside the Retailer the Restaurant is the Other Final Selling Stop.

OTHER…Direct to Consumer

  • Refers to Wine Shipments From Wineries to Straight to the Consumers.  (Not to Be Confused With Wine Sold Online From a Wine Warehouse and Shipped to the Consumer.)

WINE MERGERS & ACQUISITION

CONSOLIDATION- The Merger and Acquisition of Many Smaller Companies Into Few Much Larger Ones

  • There is Recently Been a Consolidation of Distribution
  • 3 Wine Companies Account For Half of USA. Wine
  • 5 Companies Account For Over Half of Australia Production
  • “Questions to Qualify Wine Preference”
  • What Do you Normally Like Drinking?

My Thoughts…Sometimes Consolidation is Good, it Keeps Producer Motivated to Focus On Producing High Quality Wine In Order For the Potential of Someone Purchasing Them.  What Happens is Sometimes After the Acquisition/ Consolidation the Driving Force Behind the Wine/Brand is Removed and the Drive of the Winery and the Quality of the Wine Declines.

WINE COMPANIES

WHAT IS A WINE COMPANY?

  • TOP 20 LEADING WINE COMPANIES. **Done by Wine Business Monthly…2020 (Ranked by Cases Sold Domestically)
    • #1- E & J GALLO
      • Barfoot, Frei Brothers, Louis M. Martini, MacMurray Ranch
    • #2- The WINE GROUP
    • #3- CONSTELLATION WINES
      • Jackson Triggs, Kim Crawford, Robert Mondavi
    • #4- TRINCHERO FAMILY ESTATES
    • #5- TREASURY WINE ESTATES
      • Beringer, St. Jean, Etude, Penfolds, Stags’ Leap
    • #6- BRONCO WINE COMPANY
    • #7- CHATEAU STE. MICHELLE
    • #8- JACKSON FAMILY ESATES
      • CALIFORNIA– Anakota, Arrowood, Brewer-Clifton, Byron, Cambria, Capture, Cardinale, Carmel Raod, Cenyth, Copain, La Crema, Edmeades, Freemark Abbey, Galerie, Hartfood, La Jota, Kendall-Jackson, Legacy, Lokoya, Maggy Hawk, Matanza Creek, Mt. Brave, Murphy Good, Nielson, Siduri, Stonestreet, Verite, Wind Racer
      • OREGON– Gran Moraine, Penner-Ash, Willakenzie, Zina Crown
    • #9- DEUTSCH FAMILY WINE (Josh Cellars)
    • #10- C VINA CONCHA Y TORO (Fetzer Vineyards)
    • #11- C PRECEPT WINE
    • #12- BOGLE
    • #13- VINTAGE WINE ESTATES
    • #14- WX BRAN
    • #15- The FAMILY COPPOLA
    • #16- C. MONDAVI & FAMILY
    • #17- FOLEY FAMILY WINES
    • #18- J. LOHR VINEYARDS & WINE
    • #19- KORBEL CHAMPAGNE CELLARS
    • #20- DUCKHORN VINEYARDS
  • OTHER WINE COMPANIES
    • BOISSET COLLECTION
    • NAKEDWINES
    • K VINTNERS
    • WENTE WINEYARDS
    • SCHEID FAMILY WINES

WINE & TAXES

  • Uncertainty of Exact Bottle and Barrel Content For Tax Purposes Lead to the Standardization of Bottles and Barrels Sizes In the Old World and New World.
  • Taxes On Wine and Alcohol are Highly Regulated by the Tobacco.
    • Under 14% Abv. $.21 per 750 Ml.
    • Between 14%-21% Abv. $.32 per 750 Ml.
    • Between 21%-24% Abv. $.62 per 750 Ml.
    • Sparkling $.67 per 750 Ml.
  • Who Pays the Taxes…Proprietor of the Bonded Wine Premises Who Sells Them For Domestic Consumption.

BONDED WINERY Commercial Enterprise That Produces and Stores Wine Under a Bond That Guarantees Payment of the Federal Excise Tax. Part of Establishing Winery With the Alcohol & Tobacco Tax and Trade Bureau is Taking Out an Insurance Policy Which Will Cover Excise Tax Liability Due to the Feds. This is Done by Total Volume In Gallons of Wine That a Winery Will Have Stored On Sight During a Given Month of a Year. Total Volume is Broken Down by Tax Class Which is Determined by the Wines Alcohol Content and Taxed Accordingly.

  • BONDED WINERIES MUST HAVE
    • Bond Number-
    • Wine Still In Bond-
    • Bond Coverage-
  • DISTRIBUTION-
  • WINE SHIPPING REGULATIONS-
  • WINERIES HAVE TO PAY FOR LICENSING/ BONDING-
  • LICENSE TO GROW GRAPE, PERMIT TO SELL WINE-
  • COMPLIANCE-
  • COLECT TAXES FROM CUSTOMERS, AND PAY WINERIES TAXES-

VIRTUAL WINERY A Winery That Has a Physical Location (Which May Be Shared With Another Winery), Produces at Least One Brand and Has Its Own Management and Winemaker. They Use the Services of a Bonded Host Facility  (Winery or Custom Crush Facility) to Produce and Bottle Their Wine.


INHERITANCE LAWS Most Vineyards Belonged to Church or Nobility Until French Revolution When They Were Split and Redistributed.

  • Before Napoleonic Code Inheritance Laws Vineyard Were Operating Under Roman Law of Primogeniture, the Oldest Son Inherited the Entire Family Estate.
  • After Napoleonic Code Inheritance Laws, Vineyards Divided Equally Among All Male Off-Spring Regardless of Age and Later it Included Female Off-Spring.

“As a Result Over Hundreds of Years Vineyards Were Divided Among a Greater Number of Descendants and Parcels of Land Have become Smaller and Small. The Best Example of This is the Clos de Vougeot Grand Cru Vineyard Which is Divided Between 80 Owners.”


WINE & POLITICS

  • Governments, Environmentalist, Mobsters and Critics All Influence How We Drink and Are Extremely Influential On Multiple Aspect of the Entire Wine Business. What We Buy, How Much it Costs, How it Tastes, Whats On the Label as Well as Production, Distribution All Can Play a Role In Consumption.
  • Wine Has Been Used as a Status Symbol for Aristocracy and a Revenue Stream For Royal For Thousands of Years.
  • Why is it Often Easier In America to Buy Guns, Cigarettes Than it is to Buy and Ship Wines From California or any State to Another State? “One Word…Politics”
  • Why Do So Many People Have Influence On Wine From the Vine to Dinning Room Table? Grape Growers, Wine Makers, Regulators, Passionate Activists or Environmentalists, Powerful Critics, Wine Distributors, Mobsters, Government.
  • Compare the Politics of Napa vs. Bordeaux.
  • Each Country Has Its Own Wine Law Legislated by Government to Benefit Country While Hoping to Increase Quality.
    **Refer to @OLD WORLD/ NEW WORLD For Additional Information
  • “Old World” Bordeaux and “New World” Napa Form a “Geographical Axis” That the Wine World Evolves Around.”
    *Generally- Government Have Shown to Be for the Name Protection Movements Around the World and Have Backed Policy to Protect Them.
  • Getting a New AVA. or DOC. Pasted is a Highly Political Endeavor and Takes Year to Clear All Hurtles. Most Potential AVA.’s Never Come to Fruition.
  • After Prohibition Ended the Government Left it Up to Each State to Determine Which State Where to Allow Drinking. Each State Was to Make its Own Rules Regarding the Sales and Distribution of Wine Within Its Boundaries. To This Day the Politics Hinders Shipping of Wine In USA. The Patch Work of Laws State by State Makes Doing Business Extremely Difficult.

Throughout History a Country’s Politics and Political Decisions On Wine and Not a Country’s Taste Have Decided or Influenced What a Person or Culture Drinks.

POLITICS & WINE ISSUES

  • PROHIBITION– Nationwide Constitutional Bad On the Production, Importation, Sale and Transportation of Alcoholic Beverages. Called the Volsted Act/ 18th. Amendment. The Amendment Was Ratified On January 16th. 1919  and When Into Effect January 16th. 1920 and Lasted Till December  5th. 1933.
    • Loopholes In the 18th. Amendment Allowed For…
      • Home Winemakers to Produce and Consumption Up to 200 Gallons.  Each Harvest Season Rail Cars Full of Grapes Would Make Their Way to the Mid-West/ East Coast as Many Families Took Advantage of This and Produced Wine In Their Garages and Basements and Kitchens. The Most Popular Grapes to Send Back East Where Not the Varieties That Would Make the Best Wines But Grape That Would Not Spoil as Fast Such as Alicante Bousche, Carignan, Mataro, Petite Sirah, and Zinfandel.
      • The Production of Wine For Religious/ Sacramental Purposes
    • The Start of Prohibition Brought to an End the First Great Era of California Wine-Making and the Repeal of Prohibition Signified the Start of the Next Great Era of California Wine-Making
    • As a See Effect of Prohibition This Era Ushered In a Era of Bootleggers, Speakeasies as Well as Great Social Unrest.

Prohibition Destroyed California’s Wine Industry Even Though Wine Wasn’t Its Primary Target.

  • Hungary
  • Taxes
  • Protected Names– Champagne/ Port/ Bordeaux
  • England & France, 100 Year War

WORLD TRADE ORGANIZATION WTO. Global International Organization Dealing With the Rules of Trade Between Nations

  • Agreements Are Voted On and Fundamental Principles Run Throughout All Documents. These Principles Are the Foundation of the Multilateral Trading System.
  • Their Goal is to Help Producers of Goods and Services, Exporters and Importers Conduct Their Business.
  • WTO. Functions
    • Forum for Governments to Negotiate Trade Agreements
    • Handle/ Settle Trade Disputes
    • Monitor National Trade Policies
    • Cooperation With Other International Organizations

WINE & The COURTS

WORLD’S COURT International Court of Justice ICJ. or “Worlds Court” is Judicial Branch of United Nations. Located In Hague, Netherlands Its Main Function is to Settle Legal Disputes by Countries and States On Subjects That Have International Ramifications.

  • The French Have Gone to Great Length to Protect the Use of the Term Champagne. The Country is Relentless and Litigious In its Zealous Protection of the Name and the Brand, Using it Only to Refer to Sparkling Wine Produced Traditional and From Only Grapes Grown On the Chalky Vineyards In Champagne, France.
  • The Signing of Treaty of Versailles Included Guidelines for the Use of the Word In Europe and Through Out the World. Because of Prohibition the USA Didn’t Take Part In This Aspect of the Treaty. When Prohibition Ended the Loop-Hole Was Set and the Use of Champagne and Other European Word Ran Rampant.
  • In 2006 the Europe and USA Wine Trade Agreement Prohibited the Use of the Words Champagne as Well as the Use of the Words Burgundy Chablis, Port, Chianti, Sherry, Tokai. Under the New Agreement No New labels Using These Terms Will Be Approved.
  • Producers Who Where Using Term Before the Trade Agreement (March 2006)Are “Grandfathered” In. Out of Respect Most Producers Have Stopped Using the Terms But a Few Arrogant Producers and Still Using the Term.
  • Over Time There Has Been Many Organization and Movements to End the Purposeful Mislabeling and Misuse of Geographic Names.
  • *Generally– Have Had to Support From Government, Courts, and International Trade Officials and Association to Protect Reputation and Name of the Wine Region of the World.
  • Napa and Champagne Are Two Regions That Had to Deal With a Extensive Court Mess to Protect Its Name On the World Markets.
  • Now Most of the Wine Growing World Has Joined “Truth In Labeling Movement” and Signed On to a Joint Declaration to Protect and Use the Names and a Wines Origin Responsively.

WINE, ADULTERATION, FRAUD & SCANDALS

SCANDAL An Action or Event Regarded as Morally or Legally Wrong and Causing General Public Outrage

  • History- Wine Scandals, Fakes and Frauds is Nothing New to the Wine World and Has Been Going On For Thousands of Years.
  • HISTORY- People Have Been Counterfeiting and Adulterated Wine Since it Became a Commodity and Was Bought and Sold For Profit. The Chain From Grower to Consumer Lends the Opportunity For Illegal Manipulation of Wine at Each Level. Diluting or Cutting Base Wines, or Lying Its Been Done Throughout History. A Large Number of Fraudulent Bottles are of Rare and Old Which Are Limited In the World. Now Large Domaines Led by Chateau Petrus and Domaine de la Romanee Conti Are Using Secret Antifraud Processes on the Bottles and Label.
  • WINE & PHILOSOPHY?  Who Really Knows What a 65 Year Old Wine “Should” Taste Like?”
    • No One Really Knows How a 65 Year Old Wine Should Taste Like.

FAMOUS WINE ADULTERATION & FRAUDS

  • WINE SCANDALS–  ~Thomas Jefferson Wine Bottles~
    • 1985, A Cache of Bottle From the 1780’s Supposedly Belonging to Thomas Jefferson Where Found In Paris.  The Bottle Sold at Christie’s Auction Sold For Over $100,000.  It Turns Out They Were Fraud.
  • WINE SCANDALS–  ~Austrian Antifreeze~
    • 1985, Producers Mixed Diethylene Glycol to Wine to Increase Its Sweetness and  Body. The Wines Where Discovered by German Laboratories Doing Quality Control On Bulk Wine Destined to Be Blended With German Wine. (23 People Died and 90 Were Hospitalized)
    • Short Term– Lead to the Collapse of the Austrian Wine Business and Export Market.
    • Long Term– Led to Stricter Laws In Austria and Reenforced Wine Makers to Focus On Producing Higher Quality Wines.
  • WINE SCANDALS–  ~Beaujolais Blending~
    • Georges Duboeuf’ Accused of Blending Lower Grade Gamay Into Beaujolais Premier Cru Wines.
  • WINE SCANDALS–  ~Brunello di Montalcino~
    • 2008, Sangiovese Wines Were Being Blended with Lancellota Grapes and Sold as Being 100% Brunello.
  • WINE SCANDALS~Master Sommelier Exam Annulled After Leak~
    • 2018, Detailed Information On the Identity of the Wines Making Up the Master Sommelier Blind Tasting Portion of the Exam Was Leaked by a Current Master Sommelier.  As a Result the Tasting Part of the 2018 Master Sommelier Was Annulled and the 23 People Who Past Had to Come and Retake the Exam.”
  • WINE SCANDALS ~Rudy Kurmiawan Scandal~
    • Countrified by Faking Labels and Reusing Bottles and Corks.
  • WINE SCANDALS– ~Rioja Sandal~ -Marques de Riscal-
    • Invented a Gold Wire Netting That Covers the Wine Bottle That’s Impossible to Remove Without Breaking the Wire, Preventing Counterfeiters From Substituting the Wine.
  • WINE SCANDALS– ~Bordeaux Blend Scandal~
    • 1900’s, Blending Strong Wines of Spain and Rhone With Languedoc to Improve Strength and Color of the Wine Exported to the UK. Market.
  • WINE SCANDALS–  ~Champagne Investment Scandal~
  • WINE SCANDALS–  ~Fake Bordeaux In China Scandal~
  • WINE SCANDALS–  ~Italian Methanol Scandal~

THE ROLE Of The TAVERN OWNERS
The Tavern Owner Where Responsible For Taking Delivery and Opening of Barrels. (Owner Responsible For the Unadulterated Wine From Cast to Cup.) Barrels Where Sealed and Always Un-Sealed In the Middle of the Tavern Around the Costumer Who Had the Right to See the Wine Drawn From the Barrel.

  • NO ADDITIVES TO WINE 
    • No Salting- Added to Add Complexity
    • Sugaring
    • Adding Lemon Juice to Add Acidity
  • NO MASKING/ CORRECTING
    • Making Bad Wine Better
  • NO MAKING WINE LAST LONGER
    • No Watered Down Wine


**Refer to “BIBLIOGRAPHY/ SOURCES” For Details On Scholarly Works Referenced