difficult question on Port Value Chain analysis

[Paul_B]

Hi all,

not sure if this one is for a future guest corner or if we can takle it here but I have wondered about in general terms and maybe in percentages what % does the grapes, the bottle, cork, aguardente, labour, bottling, etc..
again, I'm certainly not after margins which no one will share anyway. I'm just trying to get an appreciation to where the bulk of the costs are. Granted a VP is different from a Colheita from a Ruby. I also suspect that one thing that might surface from this is there is simply no money in the grapes for those that only live off selling grapes and do not have the rest like bottling and selling a finished product...

Again , not after an MBA analysis of the industry, just something to give us all an appreciation of what goes into that bottle we enjoy.

cheers
Paul

[Miguel Simoes]

Would be curious to hear this as well.
Feel like a undervalued portion of costs, especially for aged tawny, is cost of capital.

[Tom Archer]

An interesting subject, but one where the producers might be a little shy of telling all, as some awkward conclusions might result.

As with most wine regions, there is a dependence on selling the best production at a substantial premium to offset losses on wines that disappoint. A person analysing the cost of producing the flagship products only might therefore conclude that an unreasonable profit was being made.

For example, if you average out the production costs, it would not surprise me if the foot lockers used to package Vesuvio cost rather more to make than the bottles they contain. Whilst I do think Vesuvio is over-packaged, I can understand why the Symingtons might be reluctant to provide data that allowed such an analysis to be made.