uncle tom wrote:What I am pretty certain of, given the production costs; is that sales of standard ports, in their three guises; are essentially exercises in loss reduction, rather than profit creation..
I’m not sure I agree with this. If this were the case there just wouldn’t be any Port sold in France or Portugual and brands like Rozés or Ferreira would no longer exist. I don’t doubt the profit margins are tiny but there are lots of companies with established Port markets which are not based on the reputation of Vintage Port.
Andy Velebil wrote:Remember these inexpensive Ports have to be supplied year round, year in and year out. Anything with a vintage on it is produced in far smaller quantities and requires more "selling" and advertising to get outlets to carry them. Not to mention these upper end Ports also cost more to produce (all aspects from vine to the special capsules and labels ordered in far smaller quantities which drives up price).
Not sure where you're getting your figures of three times the amount of profit for SQVP's than for LBV's, so please do elaborate on how you came up with this amount?
Again, I’m not sure I agree. Looking around at current prices, I see Taylor VP at about £45 a bottle (inc. tax), recent Vargellas at about £27, LBV at about £12 and Ruby Reserve at about £10. I don’t see how an SQVP can cost about £15 more to produce than an LBV; the different in cost of labels and capsules will be measured in pence, not pounds. There isn’t really any marketing for it and SQVP doesn’t have the elaborate set of on-release tastings that new full declarations go through. My understanding as to why Vintage Port was more expensive than normal Port is that mostly it is a numbers game. Only 1-2% of any given parcel of vineyard will be of Vintage quality in any given year so you need a big infrastructure to make it commercially.
I would have thought that the wines which are least economic to release are the very old tawnies which require lots work looking after the wines in the shippers’ cellars and then blending and bottling them in tiny quantities, but then they are compensated by huge prices.