onsdag 13 juli 2011

You get what you pay for?


Terry Theise has written one of my favourite books, called Reading between the wines. In a recent article in Serious Eats, he lists the five things which determine the price of wine:
1. The cost to produce it and bottle it, both tangible (labor, quantity per unit of land, supplies and equipment, bottles, closures, capsules and cases, among other things) and intangible (e.g., debt service),
2. The laws of supply and demand, along with the grower's willingness to price based on what the market will bear,
3. Logistical and distribution costs to get the wine from the producer to you,
4. Costs to comply with all federal, state and local regulations, and
5. for imported wines, the prevailing value of the local currency (Swedish Krona).

As most wines are imported, one can presume a more or less fixed cost of transport and tax for every bottle of wine (small differences in cost are inevitably incurred depending on if the bottles have to cross the pond). This means that to wine importers, you get twice the wine for 70 SEK as you would for, say, a 50 SEK bottle. For consumers who have to go through Systembolaget, we're not quite as lucky. Systembolaget adds 19% of the cost price, PLUS an additional 3,50 SEK per unit. For your average customer (average pocket depth, that is) this is a lot of money. You do the math on a 80 SEK bottle.
As of April this year, wine importers have a free rein to adjust their prices. That sounds great, doesn't it? This stroke of genius has taken the load off Systembolaget to negotiate the prices of wine. All well and good, yeah?
No. This means that if a wine importer raises their prices, Systembolaget is free to go find a "similar product" for a lower price. Now I can't be the only one who realises what happens when you set some pen-pusher on the task of finding a cheaper red wine....

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