At the Parrot Jungle (Miami, Florida, USA) 2004 Spring-Fest Wine &
Spirits Tasting (to benefit the Crohn's & Colitis Foundation) on 16
April 2004, a distributor had a couple wines priced unituitively.

Given that the same distributor had some 1.5 liter bottles priced at
less than twice the price of .75 liter bottles, the response I
received from a representative as to why the Lynch Bages 1.5 liter
bottle cost more than twice the .75 liter bottle did not make sense.

In other words, the economics should be the same for all producers, so
intuitively, all of them should charge either more than or less than
2X for 1.5 liter bottles.

This morning, when I looked at the other entries, I was amazed to see
a couple of them which cost 3 times as much. This pricing does not
make sense to me, so here is where you folk come in and clarify this
apparent anomaly.

Below are the subject wines and their prices.

Macrotise Chardonay $19.90
Macrotise Chardonay 1.5 liter $35.76
180%

Robert Pecota Cab Kara's Vineyar $28.55
Robert Pecota Cab Kara's Vineyard 1.5 liter $52.76
185%

Mer Soleil Chardonay $33.85
Mer Soleil Chardonay 1.5 liter $69.44
205%

Chateau Lynch Bages $51.96
Chateau Lynch Bages 1.5 liter $109.82
211%

Dutschke Shiraz St. Jacobi $32.82
Dutschke Shiraz St. Jacobi 1.5 liter $99.00
302%

Corison Cabernet $34.76
Corison Cabertnet 1.5 liter $107.85
310%






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Salut/Hi Leo Bueno,

le/on Mon, 31 May 2004 13:34:10 GMT, tu disais/you said:-

>Given that the same distributor had some 1.5 liter bottles priced at
>less than twice the price of .75 liter bottles, the response I
>received from a representative as to why the Lynch Bages 1.5 liter
>bottle cost more than twice the .75 liter bottle did not make sense.

And what was the response?

>In other words, the economics should be the same for all producers, so
>intuitively, all of them should charge either more than or less than
>2X for 1.5 liter bottles.

Intuition is not necessarily the best guide in this, certainly not if it
isn't well informed. Put simply, you are in a free market. Anyone can charge
what they like, and it's up to you to decide whether to accept that price or
not. The same arguments apply to halves as well. OK, that's no real answer.

Those friends of mine who are winemakers explain that the costings for them
are not in proportion. (By which I mean that (wine apart) the costs of a
half bottle (plus label, cork, capsule, different carton) are not half those
of bottles. And by the same logic, the costs of a mag are not twice those of
a bottle.

Anyway, an average small winemaker may well bottle 95% of his wine in
bottles. His purchase of bottles, therefore, is far larger than that of
halves or mags (hence his cost/bottle is lower). He may decide to have a
larger label, this being vintage dependant will cost far more in small runs
than bottle labels. When bottling in halves or mags, he'll need to adjust
his bottling line - which costs time = money. And so on and so on.

A very large bottling plant may well get the same quantity reductions for
mags as for bottles and if they're big enough, may even have permanent mag
and half bottling lines. So they then may find economies of scale. And so
on.

Anyway, the net result of this is that I feel it is reasonable to charge a
moderate premium for mags. As for halves, although I'm sure the costs of
shipping 24 1/2 bottles is more than that for 12 bottles (more glass,
heavier cartons) and the costs of bottling are more too, I feel that
tactically, to encourage more people to at least buy a half when in a
restaurant, producers should absorb the extra costs and sell halves at half
the price of bottles. So should restaurants.


>Mer Soleil Chardonay $33.85
>Mer Soleil Chardonay 1.5 liter $69.44
>205%
>
>Chateau Lynch Bages $51.96
>Chateau Lynch Bages 1.5 liter $109.82
>211%

Both perfectly reasonable premiums IMO.

>Dutschke Shiraz St. Jacobi $32.82
>Dutschke Shiraz St. Jacobi 1.5 liter $99.00
>302%
>
>Corison Cabernet $34.76
>Corison Cabertnet 1.5 liter $107.85
>310%

Both unreasonable, IMO. I'd refuse to pay that premium for mags and I'd
write to the wineries concerned.

--
All the Best
Ian Hoare
http://www.souvigne.com
mailbox full to avoid spam. try me at website

Typically extreme mass-market wines have mags priced at a slight discount to 2
750s, while more "collectible" wines have a slight premium. W/o intricate
knowledge of wine industry practices, I can at least offer the supply & demand
reasons I've heard:

From the supply side:
Big industrial wine concerns have a separate bottling line for mags. Cheaper to
bottle 140,000 magnums than 280,000 750s.
Most wines with smaller productions (Bordeaux chateaux, for instance) only have
a 750 line, or don't have own bottling line at all, depending on mobile
bottlers. Bottling 10,000 magnums is more expensive than 20,000 750s.

On the demand side, if a Chez Mediocre Fume Blanc 750ml is $5, consumers expect
the 1.5L to less than $10. But as collectors and auction-buyers tend to prefer
magnums (pretty strong case for large formats aging better), they demand a
premium in wines that appeal to those with cellars.

HTH

Dale

Dale Williams
Drop "damnspam" to reply

Dale Williams wrote:


> On the demand side, if a Chez Mediocre Fume Blanc 750ml is $5, consumers expect
> the 1.5L to less than $10. But as collectors and auction-buyers tend to prefer
> magnums (pretty strong case for large formats aging better), they demand a
> premium in wines that appeal to those with cellars.

Dale, I tried Google and wine-searcher, but couldn't find a source for
Ch. Mediocre! Please help this poor consumer locate some of that
ambrosial liquid.

Frustratedly yours,
Mark Lipton

>Deutschke Shiraz St. Jacobi $32.82
>>Dutschke Shiraz St. Jacobi 1.5 liter $99.00
>>302%
>>
>>Corison Cabernet $34.76
>>Corison Cabertnet 1.5 liter $107.85
>>310%
>
>Both unreasonable, IMO. I'd refuse to pay that premium for mags and I'd
>write to the wineries concerned.
>
>--
>
Ian, I agree. When I read this I only scanned prices, the premium on the
Lynch-Bages seemed about right, I didn't look closely at these two. While I
find a small premium acceptable, this is ridiculous.

BTW, usually if buying Bordeaux futures a $25-50 /cs upcharge is standard for
375s or 750s (case being considered 24/375, 12/750, 5/1.5L).
Dale

Dale Williams
Drop "damnspam" to reply

Leo Bueno wrote:
> At the Parrot Jungle (Miami, Florida, USA) 2004 Spring-Fest Wine &
> Spirits Tasting (to benefit the Crohn's & Colitis Foundation) on 16
> April 2004, a distributor had a couple wines priced unituitively.
>
> Given that the same distributor had some 1.5 liter bottles priced at
> less than twice the price of .75 liter bottles, the response I
> received from a representative as to why the Lynch Bages 1.5 liter
> bottle cost more than twice the .75 liter bottle did not make sense.

I don't know the specifics here, but often large-format
bottles are filled by hand while the 'standard' 750ml
bottles are machine-filled. That can means it's more
expensive to handle the larger bottles. The same
may be true of labeling.

Dana