When purchasing wine, Americans pay a premium due to the complex US three-tier alcohol system, which separates wineries and importers from wholesalers and retailers. Each middleman adds a markup resulting in a significant price difference between a wine purchased in Europe vs the same wine purchased from a retailer in the US. Learn how you can take advantage of traveling in Europe and save money on wine!
Tyler Colman of wine-searcher recently posed the question, How much is a $10 bottle of wine really worth? The answer, $2.40!
That was the number given by Steve Melchiskey, director of importers USA Wine West, at ProWein 2015, the annual wine trade show in Düsseldorf, Germany.
His example compares the price of a wine purchased directly from a winery in Europe compared to the cost of the same wine imported into the United States, and purchased a local wine store.
For easy math he started with a wine that leaves a European winery costing the buyer €2, or $2.40 a bottle at the moment's exchange rate.
The unfortunate truth is that a typical wine that leaves the winery costing the buyer €2, or $2.40 ($28.80 per 12-bottle case), would end up costing the consumer $10 in the US after shipping, taxes and markups!
Based on Melchiskey's calculations, if purchased in commercial quantities, it would cost the importer $10 to get the case from the winery, pay the duty and land it in a warehouse in the United States, increasing the case cost to $38.80. Then there are the costs of navigating the complex US three-tier system, which separates wineries and importers from wholesalers and retailers. First comes the importer, charging a 35% markup, which brings the case to $52, he said. The wholesaler markup is 40%, increasing the price to $80. The retailer tacks on a 50% markup, taking the case price to the consumer of $120, or $10 a bottle.
How do you avoid these markups? Eliminate the middlemen and purchase directly from the wineries!
We all know that when you're thirsty for some Champagne, it's not that easy to jump on a plane and travel directly to, well... Champagne, as tempting that would be! However many travellers visiting Europe often don't think to take advantage and purchase regional wine to take back with them.
Some would like to, but are frustrated to learn that shipping wine back from Europe to the US is, in most cases, illegal, extremely expensive, and risky. Others are not sure how to fly back with wine, or think it would be a hassle.