Since the pricing of wine is such an arbitrary practice, it would seem that any benefit of a strong dollar is minimal at best. With the combination of supply and demand and a three tiered distribution system, any currency advantages can easily be dissolved. Any thoughts on this? Thanks.
The difference between the Euro at 1.50 and the Euro at 1.10 is hardly tiny. I would say in the last few years, the main difference in French wines I follow is that it has kept the price relatively stable despite price rises at the domaines. But ITB people will have better answers here.
1 Like
I’ve found producers often adjust prices based on the deflation of the currency, but there seems to be a “window” where buying can net some savings. With respect to the 3 tier system, it can take quite some time for that to catch up (up to 12 months), just based on how and when importers buy. There is nothing to saying they will pass along the savings either 
1 Like
When I import it myself it definitely is 
It should certainly lower the COST of the imported wine. But PRICE is set by supply and demand. I would expect that wines that are in tight allocations, prices don’t move. For wines that are more commodities, e.g. Petits Chateaux Bordeaux, the prices will fall.
Price is set by demand, when you bought and when you cleared.
The producers adjust prices, discounts and bonus goods to respond to exchange fluctuations. So many times better prices are lost at this point. Some importers and dist are able to purchase money at a good rate and use it at a time when the rate is not so good. For most part it all adds up to more stable prices with an occasional reduction. As opposed to some great discount.
1 Like
What could impact prices is lower fuel cost. Eventually, I hope, lower transportation cost will result in “deals”.
In the past, a stronger dollar has led to more grey marketing of wine. May not happen as much without Premier Cru, but still likely to happen.
Also, increases the benefit of going to Europe and buying wine directly from the source, or of having a source in Europe to purchase wines from.
Gary, I am still waiting to see the bunker charges on our containers go down. The fuel has gone down by 50% and they have not adjusted the surcharge. Unreal.
Yes, I still have fuel surcharges on many of my invoices for food delivery. Any chance that it goes away or gets lowered? No. And look at airfare. Same as last year, despite fuel costs being much lower.
For wines purchased today, they are dramatically cheaper. But the wines need to bought from suppliers using today’s dollars. If a local merchant buys from for example and American wholesaler that has held the wine for a few years, unless they cost average, you will not see lower prices.
+1
And a lot of larger companies buy Euro’s in advance or prolong their paying terms, hedging their bet that it will benefit them in the coming months when they need to actually pay. That could have an effect*
*I say could as some companies, in an effort to combat so much gray marketing, are basically leveling the price playing field in different countries. For example; It used to be some wines were far cheaper to buy in the UK than in the USA, even after paying import costs it was a huge price difference. Those wines are now about the same so it doesn’t make fiscal sense to buy in the UK and ship them here myself anymore. When I asked some producers I know that is exactly what they told me.
In the thread listed above by JM, there is some talk about PC also. That stuff polluted quite a bit of area/space.
Since the euro’s plunge began in mid-2014 and almost all of its drop had occurred by a year ago (set chart to 5 years to see), one would hope it would show up more soon.
However, some recent vintages have been small, so supply has been limited in some cases. And some vintages that have hit the market in that time have had a lot of hype. On top of that, the US economy has been heating up, so I suspect that demand is pretty strong for the higher-end stuff.
So there are lots of factors beyond the exchange rate that affect US prices.
Michael,
Out of curiosity, how is the pricing of wine ‘arbitrary’?
Let me see if I can think of an example. Okay, here’s one: point inflation.
Being a consumer, that’s the perspective from which I speak. I recently ordered a couple of bottles of Rose Champagne made by a producer who makes a BdN that I enjoy. They were $40.99 each. We drank them 1 a week for two consecutive weeks. Having enjoyed them, I ordered an additional 12 bottles. Two weeks later from the original purchase, the price was $45.99. If this is not arbitrary, it surely appears arbitrary.
Have you ever checked the prices at Macy’s week to week? Or the price on the same book on Amazon day to day?
Or oil prices over the past month?
I wouldn’t say arbitrary, Michael, but prices do vary, and the prices of some wines vary greatly, mostly in the upper ‘points-influenced’ tier. At the everyday end many of our prices don’t vary much at all from year to year. We have lowered some prices because of the weak Euro.