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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 gettiing 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 importer is essentially a facilitator: He locates an estate whose wines the 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 US 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 takes 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.

Before a retailer or restaurateur has a chance 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 cost of shipping, storing, and distributing the wine will likely doube 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 occcasion, 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, 2006

OR...you shop at winerydirect.com

 
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