WSET Diploma (D2-CH 2) Factors Affecting Price Exams
with VERIFIED Questions and Correct
Answers
2017 in EU?
- ANSWERS-Frost everywhere that led to a 14% decrease in production.
Benefit of shipping in bulk?
- ANSWERS-Lighter so less expensive and more environmentally friendly.
Broad categories of restaurants?
-ANSWERS-non
destination casual
fine dining
Challenges associated
with undersupply?
-ANSWERS-Results in increased prices. May cause others to look to less expensive
options (price- sensitive markets)
Chile estimates what percentage of their vineyard area will have shortages of
irrigation water by 2050?
- ANSWERS-95%
Common taxes paid on alcohol domestically?
- ANSWERS-Sales tax paid at the point of sale.
Excise tax paid at the point of
manufacture. Some countries will
offer tax breaks.
Costs associated with transporting
wine to target market?
- ANSWERS-Transportation and
insurance
Delivery related costs to retailers?
- ANSWERS-Expensive since wine is
heavy.
Consumer usually pays a delivery
fee
Examples of human factors have lead
to changes in supply?
-ANSWERS-Relaxation of laws banning irrigation in Spain so areas not
previously viable now are.
Use of high density planting.
Modern techniques with site selection, clones, etc to enable a greater amount of
healthy grapes. So even though decrease in area under vine, can offset.
, Examples of large disparities in land prices?
- ANSWERS-Napa 10x Central Valley
Medoc AOPs 100x Generic Bordeaux
Examples of social factors affecting
demand?
- ANSWERS-Financial crisis of 2008
causing decrease in demand.
strong growth in sparkling wines in
recent times.
Decrease in consumption in traditional wine drinking countries like
Italy and France. Growth in non traditional countries like US and
China.
Explain how fluctuations in currency affect pricing.
- ANSWERS-Say 1 USD currently = 0.85 Euro.
And say a bottle of wine you would sell for 10 USD. You would currently
get 8.50 Euro. If your currency gets weaker, say 1 USD = 0.75 Euro, you
would only get 7.50 Euro.
If it gets stronger, say 1 USD = 0.95 Euro, you would get 9.50 Euro.
How are bottles packaged for shipping?
- ANSWERS-Packaged in boxes and loaded into crates and pallets.
How do change in reputation of a wine affect supply/demand?
- ANSWERS-Growth in reputation leads to increased demand and prices
may rise.
Loss of reputation leads to decreased demand and prices
may lower. How do companies closeing/opening affect
demand?
- ANSWERS-If a company closes and a product disappears
supply will decrease and create
opportunities for competition to raise prices.
If a new product is introduced and is lower priced or better value there may be a
fall in demand for competitors product who may be forced to lower prices.
How do GIs affect supply?
-ANSWERS-Limits the geographic area where grapes can come from. In the
EU, they specify max yields which lowers it even more.
How do groups like Comite Champagne or Sherry CR balance supply and
demand?
- ANSWERS-They limit the amount of wine that can be released each year.
with VERIFIED Questions and Correct
Answers
2017 in EU?
- ANSWERS-Frost everywhere that led to a 14% decrease in production.
Benefit of shipping in bulk?
- ANSWERS-Lighter so less expensive and more environmentally friendly.
Broad categories of restaurants?
-ANSWERS-non
destination casual
fine dining
Challenges associated
with undersupply?
-ANSWERS-Results in increased prices. May cause others to look to less expensive
options (price- sensitive markets)
Chile estimates what percentage of their vineyard area will have shortages of
irrigation water by 2050?
- ANSWERS-95%
Common taxes paid on alcohol domestically?
- ANSWERS-Sales tax paid at the point of sale.
Excise tax paid at the point of
manufacture. Some countries will
offer tax breaks.
Costs associated with transporting
wine to target market?
- ANSWERS-Transportation and
insurance
Delivery related costs to retailers?
- ANSWERS-Expensive since wine is
heavy.
Consumer usually pays a delivery
fee
Examples of human factors have lead
to changes in supply?
-ANSWERS-Relaxation of laws banning irrigation in Spain so areas not
previously viable now are.
Use of high density planting.
Modern techniques with site selection, clones, etc to enable a greater amount of
healthy grapes. So even though decrease in area under vine, can offset.
, Examples of large disparities in land prices?
- ANSWERS-Napa 10x Central Valley
Medoc AOPs 100x Generic Bordeaux
Examples of social factors affecting
demand?
- ANSWERS-Financial crisis of 2008
causing decrease in demand.
strong growth in sparkling wines in
recent times.
Decrease in consumption in traditional wine drinking countries like
Italy and France. Growth in non traditional countries like US and
China.
Explain how fluctuations in currency affect pricing.
- ANSWERS-Say 1 USD currently = 0.85 Euro.
And say a bottle of wine you would sell for 10 USD. You would currently
get 8.50 Euro. If your currency gets weaker, say 1 USD = 0.75 Euro, you
would only get 7.50 Euro.
If it gets stronger, say 1 USD = 0.95 Euro, you would get 9.50 Euro.
How are bottles packaged for shipping?
- ANSWERS-Packaged in boxes and loaded into crates and pallets.
How do change in reputation of a wine affect supply/demand?
- ANSWERS-Growth in reputation leads to increased demand and prices
may rise.
Loss of reputation leads to decreased demand and prices
may lower. How do companies closeing/opening affect
demand?
- ANSWERS-If a company closes and a product disappears
supply will decrease and create
opportunities for competition to raise prices.
If a new product is introduced and is lower priced or better value there may be a
fall in demand for competitors product who may be forced to lower prices.
How do GIs affect supply?
-ANSWERS-Limits the geographic area where grapes can come from. In the
EU, they specify max yields which lowers it even more.
How do groups like Comite Champagne or Sherry CR balance supply and
demand?
- ANSWERS-They limit the amount of wine that can be released each year.
