Free DipWSET D2: Wine Business Flashcards

DECK Number 1

Instructions before starting:

I RECOMMEND YOU LEAVE THE CARDS IN THE INITIAL ORDER AND USE THE “SHUFFLE” OPTION ONLY WHEN YOU MASTER THE WHOLE DECK (= 0 MISTAKE)

Read the Term on the Card and give your answer
Click on “Check the Answer” button to check your knowledge
Click on “Got It!” if your answer was correct

Click on “Need more practice” to review the card at the end of the deck and try answering another time

Click on “Shuffle” button to change cards order

GOOD LUCK!!

[qdeck]

[h] DipWSET D2 SET 1

[i] DipWSET D2 – Wine Business Flashcards
I RECOMMEND YOU LEAVE THE CARDS IN THE INITIAL ORDER AND USE THE “SHUFFLE” OPTION ONLY WHEN YOU MASTER THE WHOLE DECK (= 0 MISTAKE)

– Read the Term on the Card and give your answer
– Click on “Check the Answer” button to check your knowledge
– Click on “Got It!” if your answer was correct
– Click on “Need more practice” to review the card at the end of the deck and try answering another time
– Click on “Shuffle” button to change cards order

[start]

[q unit=”2″ topic=”1″] GRAPE GROWING COSTS

[a] 1- VINEYARD ESTABLISHMENT

2- VINEYARD MANAGEMENT

[q unit=”2″ topic=”1″] VINEYARD ESTABLISHMENT COSTS

[a] 1- COSTS OF BUYING

2- COSTS BEFORE ESTABLISHMENT

3-COSTS FOR ESTABLISHMENT

[q unit=”2″ topic=”1″] VINEYARD MANAGEMENENR COSTS

[a] 1- LABOUR
2- MACHINERY & FUEL
3- SUPPLIES
4- VINEYARD TREATMENTS
5- WATER
6- ELECTRICITY
7- INSURANCE & DEPRECIATION

[q unit=”2″ topic=”1″] WINEMAKING COST STRUCTURE

[a] 1- WINERY ESTABLISMENT COSTS (CAPITAL COSTS)

2- WINEMAKING OPERATIONAL COSTS (OPERATING COSTS)

[q unit=”2″ topic=”1″] WINERY ESTABLISHMENT COSTS

[a] 1- BUYING / RENTING THE LAND

2- COSTS OF BUILDING

3- COSTS OF EQUIPMENTS

[q unit=”2″ topic=”1″] WINEMAKING OPERATIONAL COSTS (DETAILED)

[a] 1- GRAPE GROWING or FRUIT BUYING
2- LABOUR
3- MACHINERY & FUEL
4- WINERY MATERIALS
5-WATER
6-ELECTRICITY
7- MATURING / AGING
8- PACKAGING
9- DEPRECIATION

[q unit=”2″ topic=”1″] TOP-5  COUNTRIES FOR WINE CONSUMPTION

[a] USA
FRANCE
ITALY
GERMANY
CHINA

[q unit=”2″ topic=”1″] FACTORS INFLUENCING WINE DEMAND

[a] 1- SOCIAL FACTORS

2- ECONOMIC FACTORS

3- LEGISLATIVE & POLITICAL FACTORS

[q unit=”2″ topic=”1″] WHY SOCIAL FACTORS INFLUENCE WINE DEMAND

[a] BECAUSE THEY IMPLY CHANGES IN CONSUMPTION HABITS

[q unit=”2″ topic=”1″] 10 SOCIAL FACTORS (INFLUENCING WINE DEMAND)

[a] 1- REDUCTION OF NON ESSENTIAL SPENDING (2008 CRISIS)

2- NEW CONSUMPTION TRENDS (ROSE, SPARKLING)

3- REDUCTION OF CONSUMPTION OF TABLE WINES

4- YOUNGER PEOPLE DRINK LESS WINE (SEEN AS OLD-FASHIONED, LESS TIME IN PUB IN THE UK)

5- HEALTH CONCERNS (HEALTH AWARNESS, GOVERNMENT CAMPAIGNS)

6- CHANGE IN LIFESTYLE (FAST FOODS, NO TIME FOR LONGER MEALS)

7- REDUCED AVAILABILITY OF CHEAP WINES (VINE PULL SCHEMES)

8- CHANGES IN CONSUMER PREFERENCES (e.g. PROSECCO IN US/UK)

9- CHANGES OF REPUTATION 10- CHANGES IN SPENDING PATTERNS

[q unit=”2″ topic=”1″] EXAMPLES OF CHANGES IN CONSUMER PREFERENCES

[a] 1- ROSE = USA

2- SPARKLING = PROSECCO (US / UK)

3- REDUCTION OF CONSUMPTION OF FORTIFIED WINES (higher abv.)

4- MEDIUM SWEET GERMAN WINES = OUT OF FASHION (Liebfraumilch)

[q unit=”2″ topic=”1″] EXAMPLES OF CHANGES IN REPUTATION OF A PATRICULAR REGION, STYLE OF WINE, BRAND, PRODUCER

[a] 1- WINE REVIEWS

2- ONLINE INFLUENCERS

3- CRITICS (Jancis Robinson = UK; Wine Spectator = US)

[q unit=”2″ topic=”1″] EXAMPLES OF CHANGES IN SPENDING PATTERNS

[a] 1- PRICE SENSITIVE MARKETS (UK, Germany)

2- PREMIUMISATION (US)

[q unit=”2″ topic=”1″] PRICE SENSITIVE MARKETS  (CHARACTERISTICS)

[a] 1- CONSUMERS UNWILLING TO PAY MORE THAN
LOWEST PRICE POSSIBLE FOR A GIVEN STYLE OF WINE

2- FIERCE COMPETITION

3- CAN BE PERCEIVED AS NON-PROFITABLE MARKETS BY SOME PRODUCERS

[q unit=”2″ topic=”1″] PREMIUMISATION (DEFINITION)

[a] CONSUMERS WILLING TO SPEND MORE PER BOTTLE AS THEY ARE BUYING LESS VOLUME (especially for wine perceived as higher quality wines)

[q unit=”2″ topic=”1″] CAUSES OF INCREASED WINE CONSUMPTION IN CHINA

[a] 1- GROWING MIDDLE CLASS

2- SHOW WEALTH & STATUS

[q unit=”2″ topic=”1″] ECONOMIC FACTORS INFLUENCING WINE DEMAND

[a] 1- STRENGTH OF THE ECONOMY

2- FLUCTUATIONS IN CURRENCY EXCHANGE

3- CHANGES TO THE MARKET 

[q unit=”2″ topic=”1″] DISPOSIBLE INCOME
(Definition)

[a] THE AMOUNT OF MONEY A PERSON HAS AFTER PAYING TAXES 

[q unit=”2″ topic=”1″] STRENGTH OF THE ECONOMY
(ECONOMIC FACTOR INFLUENCING WINE DEMAND)

[a] 1- STRONG ECONOMY = HIGHER DISPOSIBLE INCOME

2- LOWER DISPOSIBLE INCOME = LOWER WINE SALES

3- ECONOMIC DEPRESSION
= CUSTOMERS SWITCH TO CHEAPER WINES
= CUSTOMERS SWITCH TO LESS EXPENSIVE
ALCOHOLIC DRINKS 

[q unit=”2″ topic=”1″] FLUCTUATIONS IN CURRENCY EXCHANGE
(ECONOMIC FACTOR INFLUENCING WINE DEMAND)

[a] 1- WEAK PRODUCER CURRENCY = HIGHER PROFITS
(=higher investments in winery)

2- WEAK PRODUCER CURRENCY = COST MORE TO IMPORT EQUIPMENTS, SUPPLIES… (if needs to import them)

3- STRONG PRODUCER CURRENCY = less competitive price for export markets
= risk of loss sales & loss of profits

 

[q unit=”2″ topic=”1″] CHANGES TO THE MARKET
(ECONOMIC FACTOR INFLUENCING WINE DEMAND)

[a] 1- IF A PRODUCER DISAPPEARS = OPPORTUNITY FOR SURVIVING COMPETITORS (raise prices…)

2- IF NEW PRODUCER COME TO THE MARKET (usually with lower prices)
= FORCES COMPETITORS TO LOWER PRICES 

[q unit=”2″ topic=”1″] LEGISLATIVE & POLITICAL FACTORS
(FACTOR INFLUENCING WINE DEMAND)

[a] 1- INCLUDE CHANGES OVER TIME

2- INCLUDE LOCAL, NATIONAL & GLOBAL LEVELS

3- LAWS PROHIBITING THE SALE OF ALCOHOL

4- GOVERNMENT POLICIES TO REDUCE ALCOHOL CONSUMPTION

5- TAXATION

6- INTERNATIONAL TRADES

7- WINE LAWS 

[q unit=”2″ topic=”1″] 4 TYPES OF LEGISLATIONS PROHIBITING OR LIMITING THE SALES OF ALCOHOL

[a] 1- MINIMUM DRINKING AGE

2- PROHIBITION

3- STATE OWNED MONOPOLIES

4- 3-TIER SYSTEM (USA) 

[q unit=”2″ topic=”1″] CONSEQUENCES OF LAWS PROHIBITING
OR LIMITING THE SALE OF ALCOHOL

[a] 1- LIMIT WINE SUPPLY

2- INCREASED PRICES

[q unit=”2″ topic=”1″] WHY GOVERNMENT POLICIES TO REDUCE ALCOHOL CONSUMPTION

[a] 1- DUE TO PUBLIC HEALTH ISSUES

2- DUE TO INCREASED CRIMINAL BEHAVIORS

[q unit=”2″ topic=”1″] EXAMPLES OF GOVERNMENT POLICIES TO REDUCE ALCOHOL CONSUMPTION

[a] 1- LOI EVIN IN FRANCE (limit on advertising)

2- MINIMUM UNIT PRICING (Scotland)

3- BLOOD ALCOHOL CONCENTRATION (BAC) BEFORE DRIVING

[q unit=”2″ topic=”1″] WHY GOVERNMENTS IMPOSE TAXATION ON WINE

[a] 1- MAJOR SOURCE OF REVENUE FOR GOVERNMENT

2- PROTECT & DEVELOP NATIONAL PRODUCTION & AUTONOMY

3- REDUCE WINE CONSUMPTION (higher prices = dissuasive) 

[q unit=”2″ topic=”1″] 4 EXAMPLES OF GOVERNMENT TAXATION

[a] 1- VAT

2- SPECIFIC ALCOHOL TAXES

3- IMPORT DUTIES

4- CATEGORY DUTIES 

[q unit=”2″ topic=”1″] EXAMPLE OF CATEGORY DUTY

[a] IRELAND
DIFFERENCE STILL WINE TAXES vs. SPARKLING WINE TAXES (higher)

CONSEQUENCES = REDUCED CONSUMPTION OF SPARKLING WINES 

[q unit=”2″ topic=”1″] EXCISE DUTY ON WINE IN HONG KONG

[a] ABOLISHED TO BECOME “WINE TRADING HUB” OF EASTERN ASIA 

[q unit=”2″ topic=”1″] CUSTOM DUTIES
(definition)

[a] TRADE TARIFFS ON IMPORTED GOODS 

[q unit=”2″ topic=”1″] E.U. TRADE TARIFFS

[a] 1- MEMBERS OF THE E.U. TRADING INSIDE E.U. = 0 TARIFFS

2- NON E.U. MEMBERS STATES = TRY TO ENTER TRADE AGREEMENTS 

[q unit=”2″ topic=”1″] CONSEQUENCE OF UK LEAVING THE E.U.

[a] 1- NEGOTIATED TARIFFS ON IMPORTED AUSTRALIAN WINES

2- CHANGE IN BRITISH CONSUMPTION HABITS

[q unit=”2″ topic=”1″] 2 EXAMPLES OF TRADE TARIFFS

[a] 1- US/CHINA TRADE WAR = CHINA IMPOSED TARIFFS ON IMPORTED US WINES

2- ARGENTINA (2010s) = ALSO IMPACTED IMPORTED WINE SUPPLIES FOR ARGENTINIAN PRODUCERS 

[q unit=”2″ topic=”1″] IMPACT OF TRADE WARS

[a] NEGATIVE PERSISTING FEELING = CUSTOMERS CONTINUE BOYCOTTING PRODUCTS AFTER TARIFFS WERE DISAPPEARED 

[q unit=”2″ topic=”1″] MAIN REASONS WHY CUSTOMERS ARE DRAWN TO WINES FROM A PARTICULAR G.I.
(= GEOGRAPHICAL INDICATION)

[a] 1- ENJOYED WINES FOR THAT PARTICULAR G.I. IN THE PAST

2- BECAUSE OF STRONG REPUTATION 

[q unit=”2″ topic=”1″] IMPACTS OF G.I. CREATION ON PRODUCERS

[a] 1- INCREASED DEMAND AND RECOGNITION FOR WINES FROM THAT G.I.

2- ALLOW PRODUCERS TO INCREASE PRICES 

[q unit=”2″ topic=”1″] PDO RULES DIFFERENCES
(E.U. vs NON E.U.)

[a] 1- E.U. = VERY STRICT

2- NON E.U. = LITTLE LIMITATIONS
= REACT MORE QUICKLY
TO CHANGE IN CUSTOMER PREFERENCES 

[q unit=”2″ topic=”1″] WINE LAWS IN CHINA

[a] 2012, STOP TRADITION OF LAVISH GIFTING TO GOVERNMENT OFFICIALS + ANTI-EXTRAVAGENCE CAMPAIGN

CONSEQUENCES = PURCHASE OF PREMIUM & SUPER-PREMIUM WINES DROPPED IMMEDIATELY 

[q unit=”2″ topic=”1″] FACTORS INFLUENCING SUPPLY OF WINE

[a] 1- AMOUNT OF WINE PRODUCED

2- LEGISLATION

[q unit=”2″ topic=”1″] 7 CATEGORIES INFLUENCING AMOUNT OF WINE PRODUCED (SUPPLY OF WINE)

[a] 1- AREA UNDER VINE

2- VINE PULL SCHEMES

3- E.U. RESTRICTIONS ON PLANTING NEW VINEYARDS (1% annual growth)

4- CONVERSION TO OTHER USES

5- ABANDONMENT OF RURAL AREAS

6- HUMAN FACTORS (modern techniques & equipments)

7- NATURAL FACTORS

[q unit=”2″ topic=”1″] 4 DETAILS ON AREA UNDER VINES

[a] 1- HIGHER PLANTING SURFACE = HIGHER TOTAL WINE PRODUCTION

2- 90% OF VINEYARDS WORLDWIDE = USED TO PRODUCE WINE

3- OVER 50% OF CHINA VINEYARDS = USED TO PRODUCE TABLES GRAPES

4- E.U. = OVER 50% OF WORLD WINE PRODUCTION

[q unit=”2″ topic=”1″] EXAMPLES OF VINE PULL SCHEMES

[a] 1- E.U. (South of France, Spain, Italy)

2- AUSTRALIA

3- NEW-ZELANDE

4- ARGENTINA

[q unit=”2″ topic=”1″] 3 DETAILS ABOUT E.U. VINE PULL SCHEMES

[a] 1- DURING THE 1980s

2- WINE PRODUCTION SURPLUS = “WINE LAKE”

3- MAIN AREAS AFFECTED = SOUTH OF FRANCE, SPAIN, ITALY

[q unit=”2″ topic=”1″] 4 EXAMPLES OF CONVERSION TO OTHER USE (FACTOR INFLUENCING WINE SUPPLY – AMOUNT OF WINE PRODUCED)

[a] 1- APPLES = SOUTH AFRICA (Elgin)

2- PISTACHIOS & ALMONDS = USA

3- REAL ESTATE & TOURISM = MADEIRA

4- BUSINESS OFFICES = USA (California)

[q unit=”2″ topic=”1″] 5 DETAILS ON NATURAL FACTORS (FACTOR INFLUENCING WINE SUPPLY – AMOUNT OF WINE PRODUCED)

[a] 1- E.U.   = OVER 50% OF WORLD WINE PRODUCTION
                             = ANY NATURAL EVENT (drought, hail…) IMPACT THE WORLD MARKET

2- GLOBAL CLIMATE CHANGE

3- GOOD VINTAGE = RISK OF OVER PRODUCTION

4- BAD VINTAGES = RISK OF UNDER SUPPLY

5- NATURAL FACTORS INFLUENCE BOTH POTENTIAL QUANTITY & QUALITY PRODUCED

[q unit=”2″ topic=”1″] LEGISLATION IMPACT ON SUPPLY OF WINE

[a] 1- INCREASED NUMBER OF GIs AROUND THE WORLD

2- STRICT PDOs RULES IN EUROPE

[q unit=”2″ topic=”1″] 5 AIMS OF GIs

[a] 1- STYLE DEFINITION

2- SUPPLY & DEMAND MORE IN LINE

3- REDUCE DOWNWARD PRICE PRESSURE

4- MORE PRICE CONTROL FOR PRODUCERS
(allow long term investments)

5- MOVE WINE AWAY FROM COMMODITY PRODUCT
(easily substituable)

[q unit=”2″ topic=”1″] DOWNSIDE RISK OF GIs

[a] 1- WHEN SUCCESSFUL = PRESSURE TO EXTEND PRODUCTION AREA TO LESS SUITABLE SITES (e.g. Prosecco & Chianti)

2- COMPLAINTS FROM PDOs PRODUCERS COMPETING WITH WINE FROM LESS REGULATED COUNTRIES

[q unit=”2″ topic=”1″] SOLUTIONS TO LIMIT DOWNSIDE RISK OF GIs

[a] 1- GOVERNING BODIES
(e.g. Comite Champagne & Sherry Consejo Regulador)

2- INTRODUCTION OF “VIN DE PAYS” SYSTEM

[q unit=”2″ topic=”1″] HOW GOVERNING BODIES REDUCE DOWNSIDE RISKS OF GIs

[a] 1- ENSURE MARKET IS NOT OVERSUPPLIED

2- LIMIT NEW PLANTINGS 3- MAINTAIN PRICE LEVEL

[q unit=”2″ topic=”1″] CHALLENGES IN OVER SUPPLY OF WINE

[a] 1- GLOBAL WINE PRODUCTION
CONSISTENTLY EXCEDEED WINE CONSUMPTION
(structurally over supplied)

2- OVER SUPPLY REDUCED IN RECENT YEARS
– China & USA increased consumption
– limitations imposed on production 

[q unit=”2″ topic=”1″] CONSEQUENCES OF OVER SUPPLIED WINE MARKET

[a] 1- PRICES TEND TO FALL

2- HARDER FOR PRODUCERS TO SELL THEIR STOCKS

3- FORCED SALES AT LOWER PRICES = DEVALUE BRAND IMAGE

4- PRO-ACTIVE PRODUCERS SEEK NEW MARKETS

5- DEVELOPMENT OF PRIVATE LABELS 

[q unit=”2″ topic=”1″] PRIVATE LABELS

[a] WINE BOTTLED UNDER LABELS EXCLUSIVE TO SUPERMARKETS, DEEP DISCOUNTERS, BARS, RESTAURANTS… 

[q unit=”2″ topic=”1″] CHALLENGES IN UNDER SUPPLY OF WINE

[a] 1- GLOBAL LACK OF WINE SUPPLY IS UNUSUAL

2- EXCEPT BAD HARVEST (ex: 2017, bad harvest across Europe)

3- UNDER SUPLLY COMMON FOR PARTICULAR WINES
(ex: Premium & Super-Premium) 

[q unit=”2″ topic=”1″] CONSEQUENCES OF UNDER SUPLLY OF WINE

[a] 1- DISAPPOINTED CLIENTS

2- STRAINED BUSINESS RELATIONSHIPS

3- FINANCIAL PENALTIES FROM LARGE RETAILERS

4- CUSTOMERS SWITCH TO OTHER ALCOHOLIC DRINKS
(beer, spirits)

5- CUSTOMERS SWITCH TO CHEAPER ALTERNATIVES
(in the case of Premium wines)

6- CUSTOMER SWITCH MAY BECOME PERMANENT

[x] GOOD JOB!!   [restart]

[/qdeck]

 

 

 

 

 

 

 

 


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