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+--- Thread: Winery setting Prices, please respond (/thread-13365.html)
- Botafogo - 06-26-2001
We were just visited by the daughter of an attorney making fairly good (if you like overextracted, Parker style Cal Zin) wines who wanted $240 a case net ($20 per bottle wholesale) and was quite upset when we told her that
A) No, we would not sell it for the "suggested retail price" of $33.00 a bottle (even so-called "full Mark-up" would be only $$29.99 and we work in a VERY competitive market)
and B) this was none of her business and that attempting to set prices was frowned on by the authorities (all that "price fixing" and anti-trust stuff, you know)
I would like to send her some consumer response to this. Her justification was "My dad puts a lot of work into his wines" and I asked her "then why don't you charge ME more for them?" and warned her that if the wines got any big press then the super discounters would be selling them for $21.99 whether she liked it or not....
Your anarchist reporter of the free market, Roberto
- RAD - 06-26-2001
Roberto,
You're exactly right. Her Dad "putting a lot of effort" into the wines makes no difference whatsoever as to the final asking price--if she wants to charge more, she should be charging you.
I'm very much a laissez-faire economist, which obviously doesn't merge well with attempts at price-fixing. Not that I lose sleep over it; the market will find its own equilibrium. Trying to control prices is ludicrous; she gets her asking price, and then whatever you or anyone else gets at retail is your (or the other retailer's) business.
RAD
- barnesy - 06-26-2001
I can understand her putting a MSRP on it. I am not sure I understand her motives though. Like you said, if she wants to put value on her fathers effort AND reap the benefits, she should charge you more. The only reason I can see asking for a high retail is to get the "prestige" of a high priced wine. She can suggest a msrp to her hearts content. She just shouldn't get kersnippity when you choose to price it at whatever you wish. It sounds like she is a bit new to the retail game. Sometimes family isn't always the best hiring policy.
On a side note, price controlling and laissez-faire usually only can be assosiated with government actions. Like gas prices in the 70's. Or in a monopoly/oligopoly situation. Since she ain't "the man" and she sure as heckfire doesn't control the market, she is just being a bit over enthusiastic with her MSRP.
Barnesy
PS - did you buy the wine from her?
- Innkeeper - 06-27-2001
Just tell her that you are a "discounter." This term came into practice in retailing decades ago for precisely this reason.
- wondersofwine - 06-27-2001
As a consumer, I try to stay under $50 for any bottle of wine (including Burgundies and German eisweins where it might mean a 375 ml. bottle) and under $30 for California wines. Pricing it at $33 a bottle retail would most likely cause her to lose me as a potential customer. I just picked up a Ridge Lytton Springs Zinfandel for $29.95, barely making my cutoff point.
- Thomas - 06-27-2001
Here in NY price controls by the Liquor Authority were shot down a long time ago--used to tell retailers what their mark up had to be. But wineries still try to "suggest" the retail price, and I do not take their suggestions.
The lady is either using retailers to help her boost the status and price of her family's wine, thinking that if they have the incentive to make a better profit, she could circumvent spending her money on marketing for the prestige, or she is trying to show the retailer that the wine commands a higher retail price but she is selling it at a price the retailer can make a better mark up. Neither tactic works anyway...
[This message has been edited by foodie (edited 06-27-2001).]
- ddf68 - 06-27-2001
Roberto, put me down for I think she's crazy, but even the devil needs an advocate, so here goes:
Antitrust lawyers call this a "retail price maintenance scheme". Retail price maintenance schemes generally do not violate federal antitrust laws. The theory seems to be that the manufacturer has a legitimate interest in selling only through retailers with a large enough margin to provide good service and support--you see this, for example, in the ski industry. You could make the same argument here--bigger margins make it more likely that you'll have more knowledgeable salespeople, better storage conditions, less likelihood that the shop will give customers a hard time returning a bad bottle, etc. All of which adds up to a greater likelihood that customer will like "Attorney Zin" and buy more, tell their friends, etc.
I think she's crazy because it seems to me that these concerns are more applicable to a (semi) durable good like skis which the average purchaser will be stuck with for at least a couple of years than for a consumable which, like as not, will be gone in a week. Also, I imagine that getting the desired result is a lot easier where you've got ski retailers with only few brands as opposed to the hundreds of brands that a wine retailer will carry.
ddf
[This message has been edited by ddf68 (edited 06-27-2001).]
[This message has been edited by ddf68 (edited 06-27-2001).]
- Botafogo - 06-27-2001
The "tied house" laws DO proscribe her from enforcing any sort of pricing regime and, alcohol being a controlled substance, other controls apply as well: she cannot discriminate on who she sells it to other than on the basis of credit / payment. If the Wine Club in Orange County wants to buy some and she has some inventory she MUST sell them some and they WILL sell it for $23.00.
But, the big question I would like input from consumers on is "What do you think of a winery who wants their retailers to charge twice the going mark-up?" Doesn't this offend you?
And, no, we did not buy the wine.
- ddf68 - 06-28-2001
I'm not offended. I'm with RAD in thinking that the market is going to find its price. Some retailers will be high for whatever reason, but I don't think they can get away with it, at least as far as my wine dollar is concerned, given the amount of retail wine pricing information that is easily available courtesy of the internet. Every once in a while I screw up and overpay for something, but that's my fault for not doing my research.
ddf
[This message has been edited by ddf68 (edited 06-28-2001).]
- cpurvis - 06-28-2001
I'm w/ RAD & ddf...the market makes the final determination. If she thinks they're worth over $30, then she should try to sell them at that price...& good luck! I can think of a host of zins in the $15-25 range that I'd reach for first.
As I've recently mentioned, we have a local vintner whose products sell for over $20 and sell out each year. By comparison, the wines he makes aren't at all equal in quality to the $10 & under budget buys that we discuss on this Board. However, the local market continues to speak in his favor, so more power to 'im. cp
[This message has been edited by cpurvis (edited 06-28-2001).]
- winoweenie - 06-29-2001
My remark to anyone that takes this approach in selling is simple; " Young Lady, If you know so much about the retail business that you can tell me how to merchandise my store, I suggest you and you're father open a retail wine shop ". WW