How a $10 bottle of wine becomes a $30 bottle.
 "So
you were in Florence on vacation, and you noticed
that the bottle of Brunello di Montalcino you pay
$100 for in the United States costs a third of
that in the trattoria you ate in every night...
Americans...pay
not only the pure shipping fees of getting a
wine from Italy to the United States, but also
the cost of the assorted people who make it happen.
The first of these is the importer, who is licensed
both federally and in the state in which he
does business. A wine impoter is essentially a
facilitator: He locates an estate whose wines
he thinks he can sell in the United States, cuts
a deal with the winery to purchase some, than takes
care of getting it here.
The importer's two main
tasks after finding and purchasing the wine are
first to produce a label that meets requirements
outlined by the U.S. Customs Service (which can
be a nightmare of nitpicky bureaucratic editing),
and second to consolidate the shipments of the
wine, most of which leave Italy from the Tuscan
port of Livorno. Naturally, the importer charges
a fee for this service.
Once the wine lands on American shores, the law
requires that a wholesale distributor take possession
of it and oversees its sale to retail stores and/or
restaurants...In most cases
an importer is simply an importer, and therefore
must form partnerships with various distributors across
the country. |
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Before a retailer
or restaurateur has a change to buy a wine
from a wholesale distributor, a variety of
costs have been built into the wholesale price:
shipping costs from Italy to America; the importer's
fees; a variety of excise and other taxes;
and the wholesaler's fees for storing the wine
getting it from point A to B. After that, the
retailer or restaurateur takes a cut before the
consumer price is set.
It works like
this:
Let's say an
American importer, who typically has exclusive
rights to the products he brings to the States,
pays an Italian winery $10
a bottle for a particular
wine. Generally speaking, the costs of shipping,
storing, and distributing the wine will likely
double the price, to $20
wholesale in the States. A standard retail
markup formula is 50 percent of cost, meaning that
a wine bought at $20 wholesale will be marked up
in a store by half of its cost ($10), putting the
price to the consumer
at $30.
In a restaurant, where the standard
markup has historically been three times cost,
that same wine will be $60.
As a general
rule, if what you're paying in a restaurant is
more than double what you pay at retail, you're
being overcharged - although
that's tough to say if the wine is very rare or
an older vintage.
The above scenario is the most simple
one. On occasion, an Italian winery may work with
a consolidator, broker, or marketing concern when
dealing with American importers, meaning that the
importer can't buy directly from a winery and
thus must absorb the costs of a middleman. And
once the wine is here, its passage from importer
to distributor to retailer or restaurateur is subject
to lots of haggling.
Finally, in the multitude
of states known as "control" states, where the
state government takes possession of wine before
selling it to retailers and restaurants, prices
will be higher still, because the state adds
in its own layer of fees."
--- Vino Italiano,
2005
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