Sunday, October 6, 2019

The difficulty of finding the right Wine's Average Market Price

The difficulty of finding the right 

Wine's Market Price

Trump 25% additional duties on wines
from France, Germany, Spain and the UK
by ©LeDomduVin 2019 

(Trump photoshopped credit to u/qda on reddit)

Like the stock prices, wine market prices always move up and down due to the fluctuations of supply and demand. Fortunately for us, they remain generally more consistent as the fluctuations for wines are not as wild and sudden. And to a certain extent we could even say that as wines get older, for most high-end wines, prices tend to go up rather than down (especially with great vintages bottled in large formats). 

Yet, prices also go up and down due to the world economy (the major countries economy should I say) and, sometimes, also due to the decisions made by their leaders or governments. On that matter, for example, Trump decided a few days ago to add additional duties on some European Wines (for various reasons), and consequently, the market prices for these specific wines sold in the US market will rise. 

Taken aback by this decision, in this instance, I somehow felt the sudden need to write a post about wine's market prices, and the difficulty to find the right ones among the various major websites and apps offering them. As many of you (in the US mainly) might not be able to overcome their urge to check the prices of their habitual vino on their computer as soon as the duties are effective, I thought it would be a good time to write on this subject. 

Regarding the additional duties, the official document titled “Section 301 Investigation – EU Large Civil Aircraft – Final list of products” has been written in response to an investigation stating that: “The U.S. Trade Representative has determined that the European Union (EU) and certain member States have denied U.S. rights under the World Trade Organization (WTO) Agreement and have failed to implement WTO Dispute Settlement Body recommendations concerning certain subsidies to the EU large civil aircraft industry. The U.S. Trade Representative has determined to take action in the form of additional duties on products of certain member states of the EU.” (*)

The paragraph “section 7.” of the document states that: “Wines from France, Germany, Spain and the UK will be subject to an additional 25% ad valorem import duties, for all wines other than Tokay (not carbonated), not over 14% alcohol, and in containers, not over 2 liters, effective October 18th, 2019.”

Basically, all wines (except Tokay and champagne/sparkling), containing 14% alcohol and lower, and coming in carton box or bottle of 2 liters and lower (which obviously includes magnum size) will be affected by the 25% additional import duties. Which understandably means that your usual bottle of wine from any of these 4 countries (sold in the US) will be slightly more expensive and might trigger you to look away for better values within the prices you use to pay for these bottles before.

Those who have the financial means, might not mind the added import duties and will probably continue to buy their favorites, even if at higher prices. But those who don’t (meaning the rest of us) will surely mark a hesitation at the sight of the increased price for our regular bottle of vino.

Although we all surely would prefer to pay $10 or less for our regular bottle of wine, most of us usually pay within $15-$20, the typical “sweet spot” for everyday drinking. But on October 18th, the price for that same bottle will suddenly hike to $18.75-$25, and we will surely not look at it the same way, having promise ourselves rarely to exceed $20 normally. 

Some may say that it is only $3.75-$5 bucks more and that it is not a big deal!!! However, if you buy a bottle daily, or at least as regularly as 2 or 3 times a week, it will add quickly to roughly $50 more per month (or $600/year), the price of 2.5 bottles at the previous price per month, and unavoidably put a dent in your wallet and your monthly wine budget. 

Hence the importance on checking prices online to find the right market price that suit your budget. But which website could you use to find a good reference price? 

In a wine market constantly evolving on a daily basis and more online tools and Apps at anyone's disposal appearing, nearly every year, it has become (in my opinion) more and more difficult to choose among the various websites and define what is exactly the Average Market Price of a wine as a reference. 

Most of you will tell me: "Easy! Just go on Wine-Searcher and take the Average Market Price of the wine you're looking for as a reference!" And will agree if it was that simple, yet, it isn't, and will try to explain to you why. 

💢Work in progress - to be continued soon💢

(*) If interested in the list of products subject to the additional duties, you go to this website and read or even download it here. And if you really want to read more details about "Section 301 - Large Civil Aircraft", you can go to the official website of the "Office of the United States Trade Representative" here.