Anyone Seen Hard Times in the Douro?

[Conky]

I must firstly declare that I dont mind anyone making healthy profits from their skill and endeavour.

I have read recently, as well as in the past, that people in the Port Trade are frustrated at the power and sales techniques(discounting) of the Supermarkets in the UK. The inference being that they are not making a fair profit for a good product.
Now when, for example, the Dairy Farmers make this claim, they can back it up with countless examples and images of very hard working but poor Dairy Farmers. They can also show how the product costs hardly anything at source, but jumps up in the Supermarkets, with the Supermarkets taking all the profits.
I wondered if anyone has similar information about any of the Port Workers or Companies? My very limited observations, were of expensive lifestyles and their trappings. (Please see first sentence).
So I come to the conclusion that most of the Port Houses are doing very well, and this cry of poverty/unfairness is becoming a little to close to greed. I find it obscene that you can pay more for a bottle of Port in the Duoro, than in a non-discounted Supermarket many hundreds of miles away from its birth, but only a mile or two away from my house.

I'm willing to be educated by those who may know different.

Alan

[DRT]

Alan,

I have been to VNG and the Douro three times and I have yet to see a port producer driving a Skoda

I have read and responded to some comments on this subject in another place and I am firmly of the view that port should be priced at whatever level its markets will accept. Over-pricing and over-hiping any product can only be destructive in the long term.

Personally, I would not normally pay full price for any non-VP in a supermarket. I think almost all of these are over priced for what they are and only represent value for money when heavily discounted. I for one believe that the British public shares this view, whihc is why Tesco has around 1m of shelf space for Port for 11 months of the year and then 3m or more during December when they punt out all those LBV's at £5 for granny to have a port and lemon with her Christmas dinner

In general, I think the shippers need some professional input to their pricing stategies across their entire product range. At the moment, they are just not getting it right.

Derek

[Axel P]

Conky,

Its all a matter of market-strategy.

A strong market needs to be conquered with strong marketing. UK is definitely a strong port market especially for special category-ports.

If you want to set foot on this market as a port-producer or have your foot stay where it is, you have to come across with some heavy marketing, i.e. selling your product with very little profit, without profit or even you pay on top.

If you compare the UK with the german market, offers like at Tescos are physically not there. The ports offered in the supermarket are mostly overpriced and you will find only the standard quality ports here. There is no big money to be won in Germany these days with port, so why keep trying. The differentiation is almost solely done by price. A Presidential Ruby is on sale for ┚¬6,45, while a Taylors Standard Ruby will cost you ┚¬12,90. So it has to be better, hasnt it. Thats at least the believe that the average Port-consumer in Germany follows.

The prices you pay for the LBVs at Tesco are eyewatering for a german, but:
- I havent seen a Port-Producer driving a Skoda, too
- if it wouldnt be for a (commercial) reason, they wouldnt do it.

Axel

[uncle tom]

Taking into account all the costs of bottling, distribution, merchandising and taxation, I would guess that for the great bulk of production - Rubies, Reserves and basic Tawnies - the producers are probably making around one euro a bottle for their efforts.

If they made 2 euros a bottle, and the retail price of Tesco ruby rose by £1, I would have no issue.

But I do have an issue with the pricing of their premium wines, and with people who parrot the claptrap that 'they don't make money out of ten year tawnies'

Sure they don't! - you fill a pipe with wine that costs no more than 1000 euros, keep it for ten years, and - hey presto! You've got at least 5000 euros worth of wine - not a bad return for the use of a few square feet of lodge space!

The pricing of vintage port is also in danger of destroying the market for this wine - it's no use trying to talk people into drinking it young - when I see supermarkets retailing the 2000's at a lofty price, I think of disappointed punters who won't be back next year..

VP needs to be late released, or sold to others to lay down at a price that makes it a worthwhile investment.

The producers would also be well advised to ditch their dusty and inefficient distribution systems for vintage port, and start offering sensible prices to merchants and investors who would like to take a truck down to VNG and load up ex. lodge..

..just my two penneth!

Tom

[Alex Bridgeman]

I must admit, I am also sometimes baffled by the pricing of port sold in Portugal compared to the UK and the US. How can producers possibly justify a higher price at the cellar door than I would pay for the same port in Tesco?

In some ways, the cellar list has its advantages but it will never work for the ports that do not sell out - and there are precious few that do sell out on release at the moment.

The one big change that I would like to see the producers offer us, the customer, is the ability to buy on release and then to store the ports we buy in the original cellars. I don't see this being a huge or great attraction for many people, but it should be a way for the producers to finance part of their stocks and to have an option in the future to but back stocks of wine at an acceptable price with significant maturity.

But, in the meantime, I will continue to accumulate port as and when I believe the price offers value for money and will store it in a big hole in Wiltshire and pay someone other than the producer for the privilege of doing so.

Alex

[jdaw1]

The one big change that I would like to see the producers offer us, the customer, is the ability to buy on release and then to store the ports we buy in the original cellars. I don't see this being a huge or great attraction for many people, but it should be a way for the producers to finance part of their stocks and to have an option in the future to but back stocks of wine at an acceptable price with significant maturity.

Agreed, but it is a major administrative hassle. Owners change addresses, names, are subject to fraud: it’s a job for the port producers to do in partnership with a bank. It can’t be done by somebody who happens to own a non-full incredible big hole in the ground.