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Transcript of Wine..
Primarily production geographically
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..
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
The UK is said to be the worlds second largest importer of wine.
The WineBox Ltd..
Mustafa K Hussain
about the Wine Market..
So.. Where does the UK
their Wine from..?
Our UK Competitors..
Organize a free wine tasting event.
Usefulness of the Analogy
Thank you for your attention!
Including Capital and Budgets..
What is CVP analysis?
Analysis that deals with how profits and costs change with an adjustment in the components mentioned below.
Originated from USA
90 different products in 60 different countries
Established in Chili and Argentina
million cases in 135 countries
The Wine Market in
Supermarkets have increased their share of the wine market
Including Tesco’s and ASDA
Increased sales at the cost of off-license establishments.
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
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
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
Produced a total of 29.7 million 9l cases
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
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
Overview of prices:
Buying in bulk (£2500 for 200,000 leaflets)
Negotiation of batches of 50,000+
Standard delivery costs of £6.99
Prices vary depending on the following factors:
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
Unit selling prices
Total fixed costs
Variable cost per unit
use for multi-product companies
Makes numerous assumptions
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
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.
Wine is a relatively
Despite increases in price, demand for the product is
Businesses have the choice to “
” tax burdens to consumers but their profits can still remain high.
Profit and Loss Account
Profit and Loss Account