Origin Of The Wine Equalisation Tax

According to a survey executed regarding the alcohol and drugs consumption in schools revealed that some of the student after tax enhancement using these product at major extent. However, AIC, (2013) revealed that excise data commencing the earliest time subsequent to the tax approached keen on consequence demonstrated an additional 30% decrease in RTD deals. In addition, about 1.5% declines were noticed in the alcohol consumption in Australia. Furthermore, the taxes increments were one of the options for the less consumption of alcohol beverages in the teen agers. However, NIA, (2015) elucidated that emphasising on the pricing strategies for the purpose, the cost-effective measure as the inclusive accommodated volumetric alcohol taxation and excise arrangement can be used. The non-pricing strategy could be focused that means the execution of other channels for the exclusion of use excessive alcohol; form the youth. The use educational programs, promotional campaigns and other strategies for the awareness creation should be

The structure of the wine industry is quite different around the world. The barrier to entry is relatively higher in the New World than in the Old World. Referring to the market data on the level of concentration in 1998, people can see a few players dominate the markets in Australia and the U.S. while the level of concentration is quite low in Europe. Therefore, the rivalry in Old World is intense there.

The dynamics of the global wine industry are better understood through a brief history of wine as well as an overview of the wine making process. Some countries have longer historical and cultural ties with wine then others and that can affect the quality and perception of the product in the eyes of the consumer. Also, the conditions in which the wine grapes are raised and the processes used to make the wine can create a superior wine and therefore a competitive advantage.

governments took from the loss of alcohol taxes. Even the federal government lost a sizable

The most important necessary inputs for the production of wine are grapes, bottles and labor. Concerning the grapes, there is an outstanding difference between the traditional wine producing countries for example in Europe (the south of France, Spain, Italy and Southeastern Europe) and big wine factories that operate as oligopolies like in the US and Australia. Due to the bond to traditions and the higher demand for quality in Europe most of the wineries here still stick to the original way of producing wine, including the growth of the grapes on the land around the winery, a so called vertical integration (which is often considered by producers where the supplier's price is too high or the offer is insufficient, in our case this trend results rather in traditional and cultural values than in financial ones). This eliminates the percentage of dependence on agricultural suppliers significantly, whereas concerning a big wine company the negotiation power of the supplier is quite high. These wine companies tend to have a low sensitivity towards the price they are charged, as grapes are a crucial component of wine production. However, in both cases the price of the grapes is always

The “three-tier system” for distribution does not favor small wineries. It places a different tax rate dependent on state, and the “Big Five” distributing companies hold 52% of the distributing market. Boutique distributors are not able to operate in all states, and are always at threat of being purchased by the major distributors.

Vincor does market wine alternatives itself, as a way of dealing with substitute demand. Vincor makes cider and has a wine kit business division (Spagnols) that gives Vincor some product diversification. Partly because of the ease of competition and as part of the differentiation and protection of the Canadian wine industry, Vintners Quality Alliance (VQA), a quality assurance program that identifies Canadian premium grape content, assists in making start-up more difficult for those wishing to emulate Canadian wine brands. The dollars spent on marketing and brand loyalty play a large part in protecting market share and there are certain absolute cost advantages that contribute to establishing some barriers to new competition. Ultimately, there is little cost to the consumer when considering switching brands. Experimentation in wine drinking is often a characteristic of the wine drinking market and thus can contribute to promoting new substitute entry into the market.

Does this differential treatment has anything to do with wine standard coming from outside the states?

In 2001 there were over 1 million wine producers worldwide, and no firm accounted for more than 1% of global retail sales. Because of this, it would be nearly impossible for the Robert Mondavi winery to dominate sales in any region. Due to Mondavi’s efforts, the winery became one of America’s most innovative,

Percentage-wise, wine buyers would be affected the most, with a 233 percent tax increase per bottle. The higher alcohol taxes would bring in nearly $60 billion over 10 years, and, like the increase in price of cigarettes, could deter people from purchasing alcohol as often.” (Promises Treatment Centers.)

For the purposes of this case analysis of E. & J. Gallo Winery, the wine industry is composed of all alcoholic beverages that contain between eight and twenty percent alcohol by volume. This distinction is based on the assumption that beer and the typical malt liquor contain less than eight percent alcohol by volume. The twenty percent limit is a result of state and federal tax and licensing laws. The three top competitors that are identified in this case study are E. & J. Gallo, Canandaigua and Mogen David.

With forecasting the per capita consumption for wines, Australia’s government can use the results from

In the most recent years, domestic sales of wine has declined constantly. The wine consumption is becoming more occasional. This is partially due to an aggressive anti-alcohol campaign and driving restrictions set by the local government, but also facilitated by a lack of marketing strategy: the wine market is loosing touch with the youth (the average age of wine drinker is gone up from 35 to 55) and young people are getting more keen to beer or alcohol pops.

Nowadays, in the “Old World” countries of Europe, where the bulk of the volume is still produced, this is of great concern. However, consumers, especially younger drinkers, prefer the high quality wine from famous brands which are imported into Europe by the “New World” player, and the growth rate is at average10% per

The reason being is because the wine industry has changed significantly over the past twenty years. The