Burnt stuff

[Jonathan Loesberg]

originally posted by Claude Kolm:

originally posted by slaton:
Great photos (as usual for that blog).

I especially like the part where he says the La Fortune costs 8 euro. KLWM sells this for what, $30 now?

The wine in France has gone up quite a bit in subsequent vintages in France, too. There is now great domestic demand and the estate sells out very quickly. Given the weakness of the dollar, I'm not sure Kermit is making an "extra" margin on the de Villaine wines: as a rule of thumb, count on shelf price being double the cellar door price. 8 euros x 1.425 $/euro = $11.40 x 2 = $22.80, and add some for increase in price at the cellar door over the past few vintages and you don't have much difficulty reaching $27.50, which I think is the price in CA for the 2007 La Fortune.

Yes and no. In the Rhone at least, with the weakness of the dollar, your rule of thumb, which once was a good one, hasn't worked as well probably because of American market resistance. For less expensive wines, I frequently find that the price in the US is twice in dollars plus a little more than it would be in Euros. Thus 8 euro wines come in at around $16-18. There is also quite a little bit of what the market will bear. If the wine is less known or not puffed up with big reviews, the mark-up will be less. Still even reasonably known 10 Euro Cairannes show up here for in the 20 to low 20s range.

 

[Claude Kolm]

originally posted by Jonathan Loesberg:

originally posted by Claude Kolm:

originally posted by slaton:
Great photos (as usual for that blog).

I especially like the part where he says the La Fortune costs 8 euro. KLWM sells this for what, $30 now?

The wine in France has gone up quite a bit in subsequent vintages in France, too. There is now great domestic demand and the estate sells out very quickly. Given the weakness of the dollar, I'm not sure Kermit is making an "extra" margin on the de Villaine wines: as a rule of thumb, count on shelf price being double the cellar door price. 8 euros x 1.425 $/euro = $11.40 x 2 = $22.80, and add some for increase in price at the cellar door over the past few vintages and you don't have much difficulty reaching $27.50, which I think is the price in CA for the 2007 La Fortune.

Yes and no. In the Rhone at least, with the weakness of the dollar, your rule of thumb, which once was a good one, hasn't worked as well probably because of American market resistance. For less expensive wines, I frequently find that the price in the US is twice in dollars plus a little more than it would be in Euros. Thus 8 euro wines come in at around $16-18. There is also quite a little bit of what the market will bear. If the wine is less known or not puffed up with big reviews, the mark-up will be less. Still even reasonably known 10 Euro Cairannes show up here for in the 20 to low 20s range.

Jonathan -- I think that's because the 8 euro southern Rhne producers produce in large enough quantity and in a competitive enough market that they have to sell and are consequently amenable to importers' requests/demands that they take a discount. De Villaine is in a position where he can turn around and sell to someone else quite easily and so is not susceptible to such requests. Alternatively, it could be that the importer is taking a lower margin than normal during this dollar weakness in order to be able to sell in greater quantity and/or retain the relationship with the producer by not discounting the euro price the importer pays.

I think if you look at other producers lower down the food chain that Kermit also imports, you can find examples of the less than 2x rule of thumb.