MONTGRAS: CALCULATING PROFIT PER BOTTLE OF SALES MADE TO THE US

US$/Bottle
A Retail Price $ 7.99 $ 8.99 $ 10.99 $ 14.99
B Retailer Margin (%) 30% 30% 30% 30%
C Retail Margin ($) $ 2.40 $ 2.70 $ 3.30 $ 4.50

D Distributor Price $ 5.59 $ 6.29 $ 7.69 $ 10.49

E Distributor Margin (%) 25% 25% 25% 25%
F Distributor Margin ($) $ 1.40 $ 1.57 $ 1.92 $ 2.62

G Importer Price $ 4.19 $ 4.72 $ 5.77 $ 7.87

H State Tax $ 0.45 $ 0.45 $ 0.45 $ 0.45
I Freight (Chile-US) $ 0.21 $ 0.21 $ 0.21 $ 0.21

J FOB Price $ 3.53 $ 4.06 $ 5.11 $ 7.21

K Importer Margin (%) 25% 25% 25%
L Importer Margin ($) $ 0.89 $ 1.01 $ 1.28 $ 1.80

M Net Laid-In $ 2.64 $ 3.04 $ 3.83 $ 5.41

N Total Export Costs $ 0.79 $ 0.79 $ 0.79 $ 0.79

O Breakage $ 0.02 $ 0.02 $ 0.02 $ 0.02
P Warehousing $ 0.17 $ 0.17 $ 0.17 $ 0.17
Q Duty, Import Fees etc. $ 0.35 $ 0.35 $ 0.35 $ 0.35
R Freight (Montgras Winery - Chilean Port) $ 0.25 $ 0.25 $ 0.25 $ 0.25

S Cash Net of Export Costs to Montgras $ 1.85 $ 2.25 $ 3.04 $ 4.62

T Direct Costs $ 1.08 $ 1.08 $ 1.37 $ 1.93

U Raw Material, Grapes & Labor $ 0.55 $ 0.55 $ 0.60 $ 0.66
V Dry Goods $ 0.53 $ 0.53 $ 0.77 $ 1.27

W Cash Net of Export and Direct costs to Montgras $ 0.77 $ 1.17 $ 1.67 $ 2.69
TO THE US

Remarks

(B*A)

A-C

(E*D)

D-F

G-(H+I)

(K*J)

J-L

O+P+Q+R

M-N

U+V

S-T, Profit per bottle sold

 MONTGRAS: CALCULATING PROFIT PER BOTTLE

US$/Bottle

A Retail Price $ 8.69 $ 10.19 $ 19.49

B Retailer Margin (%) 20% 20% 20%

C Retail Margin ($) $ 1.74 $ 2.04 $ 3.90

D Distributor Price $ 6.95 $ 8.15 $ 15.59

E Distributor Margin (%) 10% 10% 10%

F Distributor Margin ($) $ 0.69 $ 0.81 $ 1.56

G Importer Price $ 6.25 $ 7.33 $ 14.03

H State Tax $ 1.50 $ 1.50 $ 1.50
I Freight (Chile-US) $ 0.21 $ 0.21 $ 0.21

J FOB Price $ 4.55 $ 5.63 $ 12.32

K Importer Margin (%) 15% 15% 15%
L Importer Margin ($) $ 0.68 $ 0.84 $ 1.85

M Net Laid-In $ 3.86 $ 4.78 $ 10.47

N Total Export Costs $ 2.18 $ 2.18 $ 2.18

O Breakage $ 0.02 $ 0.02 $ 0.02
P Warehousing $ 0.17 $ 0.17 $ 0.17
Q Duty, Import Fees etc. $ 1.74 $ 1.74 $ 1.74

R Freight (Montgras Winery - Chilean Port) $ 0.25 $ 0.25 $ 0.25

S Cash Net of Export Costs to Montgras $ 1.68 $ 2.60 $ 8.29

T Direct Costs $ 1.39 $ 1.50 $ 3.30

U Raw Material, Grapes & Labor $ 0.71 $ 0.76 $ 1.44
V Dry Goods $ 0.68 $ 0.74 $ 1.86

W Cash Net of Export and Direct costs to Montgras $ 0.29 $ 1.11 $ 4.99
 CALCULATING PROFIT PER BOTTLE OF SALES MADE TO THE UK

ottle

$ 23.99

20%
$ 4.80

$ 19.19
10%

$ 1.92

$ 17.27
$ 1.50
$ 0.21

$ 15.56
15%
$ 2.33

$ 13.23

$ 2.18
$ 0.02
$ 0.17
$ 1.74

$ 0.25

$ 11.05

$ 4.17
$ 1.43
$ 2.74

$ 6.88
G PROFIT PER BOTTLE OF SALES MADE TO THE UK

Remarks
Pricing of Tesbury promotion (£6.79), DeGras (£12.99) and Ninquen (£15.99) considered for calculations. An
additional column for Tesbury sales at £1 off considered at £5.79. All prices converted to US$.

(B*A)

A-C
On-premise distributor gets a 10% margin on drop-in shipments irrespective of whether sales is fulfilled through
them or directly to Tesbury.
(E*D)

D-F
Flat £1 tax convered to US$
US $Value Normalized to Geographic Distance between Chile-UK: (.21)*(4.06/4.11)

G-(H+I)
The case says the importer margin is in the range of 10-15%. The higher end of the range is taken here.
(K*J)

J-L

O+P+Q+R
Assumed to be independent of export destination
Assumed to be independent of export destination
Data for 2001 (taken from https://www.ifs.org.uk/uploads/publications/ff/excise.xls) shows 116 pence is charged
for every 75 cl (or 750 ml) bottle of wine. This value has been converted to $.
This will remain the same whether exports are made to US or UK

M-N

U+V
Corresponding US data on costs computed as % of FOB price. The same % is multipled with FOB price here.
Corresponding US data on costs computed as % of FOB price. The same % is multipled with FOB price here.

S-T, Profit per bottle sold