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Wine..

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by

Gaurav Chauhan

on 25 November 2013

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Transcript of Wine..

The UK has a small but thriving industry connected to the production of wine

Primarily production geographically
south

UK production mainly in white wine with new investments for sparkling wine..
A.V.S. Wines and Beers Limited - incorporated in 1995.
1 shareholders own the total shares within the company.
It is not part of a group.

The latest Annual Accounts submitted to Companies House for the year up to 31/08/2011 reported:
'Cash at bank' of £86,855,
'Liabilities' worth £184,340,
'Net worth' of £-8,113.
Is the option to advertise in a national newspaper
Tends to be very costly
Does however target large audience
Alternative of advertising in Food and Wine brochures
Targets fewer numbers but correct audience
Bluewater Shopping Centre..
Transformational concerns
Cost is approximately £4 per cubic feet.
Roughly 12 bottles of wine per cubic feet, so shipping costs are £0.33 per bottle.
Shipping costs from Australia for example.
Additional costs to be considered
Total sales of wine in UK just under
£9 billion
in 2011
The UK is said to be the worlds second largest importer of wine.
The WineBox Ltd..
Presented by...

Daniel Heath
Dominic Mundie
Gaurav Chauhan
James Bruce
Mustafa K Hussain
Ryan Catahan

Contents..
THE
WINE
MARKET
...
Basic
FACTS
about the Wine Market..
Facts continued..
So.. Where does the UK
import
their Wine from..?
Wine
Brands..
Our UK Competitors..
Marketing Strategy..
Newspaper Advert
Organize a free wine tasting event.
Logistics
Assumptions Of
CVP
Usefulness of the Analogy
Sensitivity Analysis
Sensitivity Analysis
Sales Forecast..
CVP Analysis
Sales Forecast..
Thank you for your attention!
Introduction..
Market
and
Competition..
Market
Strategy..
The
Finance's..
Including Capital and Budgets..
CVP
Analysis
Evaluation..
What is CVP analysis?
Analysis that deals with how profits and costs change with an adjustment in the components mentioned below.
Most
productive
brand
Originated from USA
80
million cases
90 different products in 60 different countries
Most
admired
brand
Established in Chili and Argentina
20
million cases in 135 countries
The Wine Market in
2012
Supermarkets have increased their share of the wine market
Including Tesco’s and ASDA
Increased sales at the cost of off-license establishments.
Leaflets
Selling price is constant.
Costs are linear and can be accurately divided into variable and fixed elements.
In multi-product companies, the sales mix is constant.
In manufacturing companies, inventories do not change.
Usefulness to business managers
Provides a detailed
snapshot
of company activity
Effects of changes
can be viewed making future performance clear
“Simulation analysis in which key quantitative assumptions and computations (underlying a decision, estimate, or project) are changed systematically to assess their effect on the final outcome. Employed commonly in evaluation of the overall risk or in identification of critical factors, it attempts to predict alternative outcomes of the same course of action.”
Helps managers assess what factors would cause a project to turn out a smaller profit
Can try and determine how to manage/minimize any risks involved.
420 Registered vineyards in the UK
1400 hectares of planted vines, 1200 hectares in production
Top 3:
Chardonnay
Pinot Noir
Bacchus
The UK in 2011 - 6th largest consumer
147 million cases of wine
China - 630 million cases
USA second with 329 million cases.
Austraila biggest importer to UK
Fine wines and worlds leading trader connections
Champagne and Port prodcuts
Wine
Brands..
Produced a total of 29.7 million 9l cases
73% increase..
Wholesale of Wine, Beer, Spirits and Other Alcoholic Beverages
'Cash at bank' of £2,953,000
'Liabilities' worth £58,817,000
'Net worth' of £68,108,000
UK's Largest retailer of wine by the mixed case

Developed in 1980
Our
UK Competitors..
Other Indirect Competitors..
Marks and Spencer’s (M&S) - Wine industry
M&S has won awards: Wine Awards 2011 and the International Wine Challenge 2011
Wine consumers can rely that M&S will provide professional advice
TV Adverts
Overview of prices:
Buying in bulk (£2500 for 200,000 leaflets)
Negotiation of batches of 50,000+
Standard delivery costs of £6.99
Additional costs
Prices vary depending on the following factors:
The Region
Length of the commercial
Time of day
The programming environment
The time of year
The target audience and volume of viewers
150,00m2 of retail
330 top UK and international brands
50 restaurants and bars
13,000 free parking spaces
20 hectares of parkland and seven lakes
Main components of CVP
Level or volume of activity
Mix of products sold
CVP Analysis
Unit selling prices
Total fixed costs
Variable cost per unit
Limitations..
Limited
use for multi-product companies
Makes numerous assumptions
Usefulness..
Wine and Spirit Trade Association
Gavin Partington (2010) executive at the Wine and Spirit Trade Association (WTSA) said:
International wine businesses are “re-balancing” their investments elsewhere in Europe.. being driven by the tax regime
Uk seen as “unattractive market”
Recession - firms are afraid to “pass on” too much tax
Tax
Duty
on Wine
The Sunday Telegraph - price of a bottle of wine has increased by 25p (Labour)
Duty on it has increased by 53.3p
Demoralising and somewhat unfavorable
Constellation sells 25m cases of wine per year (UK and Europe)
When consumers spend £4 on a bottle of wine: £2 goes directly to the Government on duty, £1 goes to the retailer, wine’s producer gets just £1 per bottle.
Effects of
Taxation
on Wine
Wine is a relatively
inelastic
good
Despite increases in price, demand for the product is
not
very responsive
Businesses have the choice to “
pass on
” tax burdens to consumers but their profits can still remain high.
Profit and Loss Account
Conservative
Profit and Loss Account
Ambitious
CVP Graph
Full transcript