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A great question to which I do not have the answer. I did send an email to the producer about a week ago; should it respond, I shall put your query to it.
I once asked this question of a producer, and was suprised to learn that the law of two-thirds only applies to tawny Port production. Vintage (and late bottled vintage) Ports are not subject to the law of two thirds. The obvious conclusion of this is that if you are a new Port producer and you need to raise some cash quickly — make and sell a Vintage Port.
That’s interesting. I’ve tried to have a look at the current rules but I am afraid they are far beyond my Portuguese, even with the help of Google Translate; although I can’t see any distinction by type, only age. This would suggest that you could sell a lot of vintage with a reserve of ruby, for example.AHB wrote: ↑19:38 Tue 09 Jun 2020I once asked this question of a producer, and was suprised to learn that the law of two-thirds only applies to tawny Port production. Vintage (and late bottled vintage) Ports are not subject to the law of two thirds. The obvious conclusion of this is that if you are a new Port producer and you need to raise some cash quickly — make and sell a Vintage Port.
The date of these rules reminds me that 1986 was a time of considerable regulatory reform for Port. It was the year when they did away with the requirement to have a warehouse in VNdG and therefore opened up the market to independent quintas. I suppose another possibility is that the rules may not have been as strict in 1983.Decreto-Lei n.º 166/86 de 26 de Junho wrote: ARTIGO 21.º
A capacidade de vendas das entidades referidas no artigo anterior é calculada em função das existências registadas em seu nome no Instituto do Vinho do Porto em 31 de Dezembro do ano anterior e é fixada, para além do previsto no artigo 22.º, no quantitativo obtido pela adição dos quantitativos referidos nas alíneas seguintes:
a) Um terço dos vinhos de mais de um ano;
b) 30% dos vinhos adquiridos ou elaborados na última vindima, desde que estes se situem entre um mínimo de 75% e um máximo de 125% das vendas efectuadas no ano anterior a essa vindima;
c) 15% dos vinhos adquiridos ou elaborados na última vindima, no caso de ser ultrapassado o máximo de 125% referido na alínea anterior, na parte excedente a este limite;
d) A percentagem da fórmula A/B = 30/X' se os vinhos adquiridos ou elaborados na última vindima não atingirem 75% das vendas efectuadas no ano anterior, representando A os 75% que a firma deveria ter obtido, B a quantidade obtida e X a percentagem de capacidade que os vinhos obtidos atribuirão.
§ único. Por vinhos adquiridos ou elaborados entendem-se aqueles que satisfaçam os preceitos regulamentares estabelecidos pelo Instituto do Vinho do Porto, ouvido o conselho geral.
ARTIGO 22.º
Os comerciantes poderão também durante o ano adquirir capacidade de venda pela compra à produção, incluindo a Casa do Douro, de vinhos generosos, os quais atribuem, conforme a idade, a seguinte capacidade de venda:
Até 3 anos - 20%;
De mais de 3 e até 4 anos - 40%;
De mais de 4 e até 5 anos - 60%;
De mais de 5 e até 6 anos - 80%;
De mais de 6 anos - 100%.
§ 1.º Metade, pelo menos, da capacidade a adquirir nestes termos tem de ser obtida pela compra de vinhos que atribuam, no máximo, 40% de capacidade.
§ 2.º Só poderão beneficiar do disposto neste artigo os comerciantes e ou exportadores que em 31 de Dezembro do ano anterior tenham adquirido vinhos em qualidade não inferior a 75% das vendas efectuadas dois anos antes ou que atinjam esse mínimo pela compra de vinhos que dêem apenas 20% de capacidade.
§ 3.º O Instituto do Vinho do Porto pronunciar-se-á previamente sobre a qualidade e idade dos vinhos adquiridos aos produtores, verificando também se são limpos de prova e cheiro ou susceptíveis de assim se tomarem mediante tratamento conveniente.
§ 4.º Os vinhos em poder da lavoura ficarão em regime de contas correntes com a entidade competente, de acordo com a legislação em vigor, que as comunicará ao Instituto do Vinho do Porto para efeitos de fiscalização e confirmação de data, se a merecerem.
Isn't it already a multi-year endeavor because it takes 2 years (technically 18 months) to make a Vintage Port in the first place? So allowing for the law of thirds doesn't actually impact your timeline that much. The formulas in Articles 21 and 22 actually allow you to sell your first product as soon as it is ready, but you'll probably have to purchase some sales capacity using the formula in Article 22 if you want to sell all of it.
Yes: this is quite right. Before I looked at the regulations, I thought it was arranged by category so that, if you wanted to sell, say, 500 cases of VP, you needed to have a reserve of a further 100 cases of VP. But it looks like everything is covered which would include LBVs and tawnies which will mature for longer, as well as “standard” Ports like basic rubies and tawnies which will be higher volume but lower profit.Glenn E. wrote: ↑21:40 Wed 10 Jun 2020 Isn't it already a multi-year endeavor because it takes 2 years (technically 18 months) to make a Vintage Port in the first place? So allowing for the law of thirds doesn't actually impact your timeline that much. The formulas in Articles 21 and 22 actually allow you to sell your first product as soon as it is ready, but you'll probably have to purchase some sales capacity using the formula in Article 22 if you want to sell all of it.
[...]
This is assuming that the law of thirds does actually apply to all Port and not just to Tawny Port. Because if you think about it, it doesn't really need to apply to Tawny Port due to the amount of time required to make Tawny Port in the first place.
It seems like that would cause problems with the formulas, because parts of those formulas are based on previous years' sales. Something that has been bottled for later release has not yet been sold, so would disappear from the equation that allows for sales and yet would count against the producer as sales when finally sold.Andy Velebil wrote: ↑14:07 Thu 11 Jun 2020 Iirc, the law of a third only applies to what is actually in barrel. Regardless of type. Anything bottled but held back for later release does not count toward that.
I think the IVDP website has copies of the regulations as enacted. To work out what is currently in force you need to trace through them to work out what been repealed and / or amended. From what I can see, they do it in a similar way to how we do it in the UK: lots of piecemeal regulations (e.g. for paragraph “x” substitute “y”) with occasional tidying by repealing the whole lot and starting again. For example, all of the regulations which specify the different categories have been taken out of the Decreto-Lei n.º 166/86 de 26 de Junho and are now governed by (I think) the Regulamento n.º 242/2010, de 26 de fevereiro de 2010 which, in turn, has been amended a few times.
Yes, this. The two articles that we've been looking at are as they were enacted in ... 1986, I think? They've probably both been amended, possibly multiple times, since then.
That's awesome! I might have to actually start using my Instgram account.Andy Velebil wrote: ↑18:54 Wed 08 Jul 2020It is a Symington's instagram page. At the end of the week they ask for questions and they answer them during the week. Pretty cool.
Just learned that this was recently reduced to 75.000 liters.AHB wrote: ↑07:45 Tue 16 Jun 2020 However, they were very clear that the law of two-thirds only applies to their sales of tawny Port and not to sales of VP and LBV. This would make sense if you look at tawny Port and the fact you need to have a good stock to be able to make quality blends. I'm not confident that the rules published on the IVDP website (even the Portuguese version) are accurate. For example, wasn't the minimum level of stock required to register as a shipper recently reduced to ?100,00? litres?