Port Pricing

[Roy Hersh]

An understanding of who pricing works here in the USA:

I was speaking to an importer that deals with Colheita, Port, Douro wines, Italian wines etc.

I told him about a DOC wine that I know of in Portugal that could be imported to the USA. The producer would be willing to sell it at 5 Euros to the importer. But then of course their is CIF, better known to industry insiders as Cost, Insurance and freight ... which all drive the price up to get the wine into the USA. Not to mention if they are using a freight consolidator or a Custom's Clearance expeditor.

Importers hedge their bets when buying pallet loads, because they build in some protection should the Euro head the other way (up) as it did today, breaking $1.30 for the first time in awhile. The importers usually build in 5-10 cents when buying wine that might take awhile to sell.

The importer makes a profit on selling the wine to the distributor who then makes money selling it to the retailer who then makes money selling it to the consumer.

So a very reasonable price here in the USA on the shelf for that same 5 euro bottle winds up at $16-20 depending on freight to ship from importer to distributor.

Amazed?

[Frederick Blais]

Yes it does surprise me. The SAQ here in Quebec are known to be a shark and basically there is a rule of thumb that you multiply by 4 the price in Euro to end up with the price on the shelve. I thought that USA price would at least be 35-50% less, as I have noticed on many products below 30$(products above can be fixed depending on offer and demand).

[Moses Botbol]

I did not see a huge price difference on dry wine in Switzerland this summer from Boston. Maybe a 15% less (at best) in Switzerland on Euro wines. Boston does have good prices though.

[Brian C.]

Chicago generally does not have very good prices for ports or Portugese wines. The only Portugese wine I see for less than $10 is a vinho verde. (Espiral is $4 at Trader Joe's, but I still like it.) I was in Springfield MA on business last week, and a pour of Graham's 30 was only $8. I also had a pour of Taylor 40 for $21. I remember another thread here where someone said Grilos (a Dao red that we really like) was $8 a bottle out east, and I mentioned that I had to pay $13 for it here. Chicago just is not a big market for this stuff, I guess. And maybe there's something about local liquor distribution that I don't know about. Or is it just that Portugese wines and ports are going to be a little cheaper in locales that have a Portugese community?

[Roy Hersh]

Brian,

I truly don't think this has anything to do with the lack of a Portuguese community in your area. For whatever reason, Chicago has never been a city that has embraced Port in any real sense. Given that it is so cold there in the winters, one would think it should be a natural to be a great Port market, so it is really confounding. I hope someone else might be able to explain this because I've never understood why, especially given the large population. Chicago remains a Port enigma to me.

[Brian C.]

Roy,

I'll give you a really crazy example of Chicago pricing that I just found out about. The wine shop by me sells the Quinta do Crasto 2000 VP for $53. I look online and I find that a shop in New York sells this same bottle for only $23.

http://www.cabriniwines.com/main.asp?request=SEARCH

(type in quinta do crasto 2000)

This same wine shop by me seems to be the only serious local carrier of Portugese table wines, also. That means that they can enjoy a good markup as they have carved a real niche here. One other shop I asked about it said that they tried once but they just couldn't sell any Portugese table wines, so they stopped carrying them. As bad as the port market is here, it's even worse for the Portugese table wines. My wife and I feel like we must be the only people in Chicago who ever drink any Portugese table wines.

[Roy Hersh]

Brian wrote:
>I'll give you a really crazy example of Chicago pricing that I just found out about. The wine shop by me sells >the Quinta do Crasto 2000 VP for $53. I look online and I find that a shop in New York sells this same bottle >for only $23.

I would bet that that $23 price is either for an LBV or a 375 ml bottle ... for if it is truly a 2000 Crasto VP at that price in 750, load up your trunk!

As to the lack of Douro wines, I have found that folks in Chicago are either focus on Italian, German or French wines. They have yet to take a chance in experimenting on wines from the likes of So. Africa, Portugal, New Zealand and even Spain (although to a lesser degree). They like the classics and are in general, not as open to experimentation. You can always find the Portuguese Douro wines in CA and have them shipped to you.

[Roy Hersh]

Frederick wrote:
The SAQ here in Quebec are known to be a shark and basically there is a rule of thumb that you multiply by 4 the price in Euro to end up with the price on the shelve.

Frederick, as a sweeping and too broad of a generalization ... here in the USA, the common "multiplier" is 2.5x in order to get to the shelf pricing. So there is a significant difference.

[Brian C.]

Brian wrote:
I'll give you a really crazy example of Chicago pricing that I just found out about. The wine shop by me sells the Quinta do Crasto 2000 VP for $53. I look online and I find that a shop in New York sells this same bottle for only $23.

I would bet that that $23 price is either for an LBV or a 375 ml bottle ... for if it is truly a 2000 Crasto VP at that price in 750, load up your trunk!

As to the lack of Douro wines, I have found that folks in Chicago are either focus on Italian, German or French wines. They have yet to take a chance in experimenting on wines from the likes of So. Africa, Portugal, New Zealand and even Spain (although to a lesser degree). They like the classics and are in general, not as open to experimentation. You can always find the Portuguese Douro wines in CA and have them shipped to you.

Well that would explain the $23 then.

I've lived in Chicago for 14 years now, and I have to say that I have been amazed at its transformation into a foodie town. It is so much more than good steaks and deep dish pizza now. (Just no Portugese restaurants yet.) I think there is a market for emerging wines here. I might have also heard that the distributors here are not carrying much of the emerging varieties. I do see more Spanish wines here than you might expect, though. Nearly every shop has Spanish wine now. And a lot of restaurants have Spanish wines on the menu. (I think I have only seen a Portugese table wine on the menu on one or two occasions.) And many places carry the South American wines, also. Portugal, South Africa, and New Zealand, not quite as much, though I would say New Zealand is probably more prevalent than the first two.

[Paul_B]

Hi Fred,

actually my comparisions done with in Portugal prices to SAQ prices reveal far more creativity by the SAQ.
I suspect that depending if they also sell other products by a producer wine, port , white , red some group pricing takes effect. example shifting profit from one product to another to allow playing with the price of a one of the group. also noticed that different "formulas" apply at the high end compared to low or medium products.
I've seen some wines at par despite shipping and government profit and some at double or more.
WHat is real give away is when you see some sub 5 euro bottles in Portugal of madeira, port, moscatel and how those bottles end up on SAQ shelf. Maderia and Moscatel under 20$ but that port is at almost 30$ just because it is Port hence popular or more well known to general public. Yet they took the same boat over and where all within 5% of each other in Portugal.

SAQ pricing is not cost plus. The margin on each bottle is different depending what the market will accept and what else is available at that price. Government monoploies should be cost plus a published fixed percentage across the board but they play games that a monopoly should not be allowed to play by law. We accept to pay for schools, hopitals, welfare etc this way but don't rip us off.

I just saw an article that we are drinking more than 10 years ago ages 15 to 44, per person in Quebec so guess they are not charging enough yet

I suspect that like income tax our booz is the most expensive in north america, now that's a society with distinction... pardon the pun for those who know what I'm refering to.

cheers
Paul

[Todd Pettinger]

I suspect that like income tax our booz is the most expensive in north america, now that's a society with distinction... pardon the pun for those who know what I'm refering to.

Is this how Alberta is getting some of it's transfer payments back???? Through the SAQ's over-pricing of Port??? If so, brothers, I am truly sorry... :devil:

Todd

[Roy Hersh]

Alright, alright ... when you Canadians think you have it really bad, consider this: In a country with approximately 10 million households ... there are about 7 million guns owned in Canada. That is 70% of all households (we'll never know how many own more than one ... skewing the % though). But the number of deaths by gunshot, are less than 100 a year and typically closer to half that.

Now look at the USA. Although there are many many more guns here ... our percentage of households that own guns is WAY WAY lower than Canada. However, the number of deaths by gunshot typically number between 10,000-13,000 per year. It is not the exponential increase in our population that does that.

I hope that I have gotten your minds off Port pricing for a moment. :help:

[Andy Velebil]

I hope that I have gotten your minds off Port pricing for a moment. :help:

Yes, but now I need to buy more guns and the prices have gone way up :devil: :devil: :joker: :wall:

[Todd Pettinger]

Alright, alright ... when you Canadians think you have it really bad, consider this: In a country with approximately 10 million households ... there are about 7 million guns owned in Canada. That is 70% of all households (we'll never know how many own more than one ... skewing the % though). But the number of deaths by gunshot, are less than 100 a year and typically closer to half that.

Now look at the USA. Although there are many many more guns here ... our percentage of households that own guns is WAY WAY lower than Canada. However, the number of deaths by gunshot typically number between 10,000-13,000 per year. It is not the exponential increase in our population that does that.

I hope that I have gotten your minds off Port pricing for a moment. :help:

I think they are nearly all in Texas though, so I'm not really all that worried. Unless war is declared between Canada and Texas.

[Luc Gauthier]

Would Texas actualy send George to fight Canada ?