VERIFIED ANSWERS GRADED A+ SCORE SOLUTION REVIEW
What are the advantages and disadvantages of grower
contracts?
+ price guarantee
- quality requirement
What are the advantages and disadvantages of selling on the
spot market?
+ higher prices during grape shortages
- lower prices during a grape glut
What are the advantages and disadvantages of being a
grower-producer who sells to a merchant to mature and
bottle?
+ no need to incur maturation, bottling, and marketing costs
- smaller profit
- loss of control over final style
What are the advantages and disadvantages of being a
merchant/negotiant?
+ no expenses of managing vineyards
pg. 1
,+ no need to purchase land
+ flexibility in bad vintages
- little control over grape growing and winemaking
- may be forced to purchase grapes on spot market in bad
vintages
Describe en primeur. What are the benefits?
- purchasers buy wine while still in bottles
- purchaser receives wine when it is bottled
- for chateaus: cash flow
- for purchasers: price may increase after bottling, bottles
may be allocated
What are the benefits of co-ops? What is the main detriment?
- pooled financial resources
- expert viticultural and winemaking services
- collective marketing of members' wines
- own labels for hi-v entry-level wine (la chablisienne)
- decision making is democratic & can be slow
What are two ways that members can be paid by co-ops?
When is each common?
pg. 2
, - weight: important in countries such as spain and italy where
vineyard sizes are small and it is not economic for growers to
produce and market their own wine
- fruit quality: some of the most dynamic wine-producing
businesses, producing very good quality wine which can be
excellent value
What is the difference between a co-op and a custom crush
facility?
Growers do not own the facility but rather pay each time they
require its services; services may include a winemaker
What are the advantages and disadvantages of selling dtr?
+ no intermediary costs
+ producers decide which retailers to pursue
+ producer has control over brand image
- difficult with large retailers
- increased admin burden for producers
- full financial risk may lie on producer (freight forwarders
may reduce this risk by insuring wine in transit)
- burden of relationship building and market research on
producer
What are the advantages and disadvantages of selling via a
distributor?
pg. 3