Free DipWSET D2: Wine Business Flashcards

DECK Number 2

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 2

[i] DipWSET D2 – Wine Business Flashcards

Deck 2

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=”2″] VINEYARD ESTABLISHMENT 1st COST

[a] BUYING or RENTING THE LAND 

[q unit=”2″ topic=”2″] THE PRICE OF THE VINEYARD REFLECTS
(cost of buying)

[a] THE POTENTIAL TO PRODUCE HIGH QUALITY FRUITS 

[q unit=”2″ topic=”2″] EFFECT OF SCARCITY OF LAND ON BUYING A VINEYARD
(area under G.I. for instance)

[a] INCREASES VINEYARD PRICE
(GIs & PDOs limit the area of land available) 

[q unit=”2″ topic=”2″] COSTS BEFORE ESTABLISHING THE VINEYARD

[a] 1- SURVEYING THE LAND

2- SITE CLEARANCE
(removing large rocks & vegetation)

3- BUILDING ACCESS ROADS
(to the vineyard & within the rows) 

[q unit=”2″ topic=”2″] WHY SRUVEYING THE LAND BEFORE ESTABLISHING A VINEYARD

[a] 1- TO CHECK SUITABILITY TO VITICULTURE

2- TO IDENTIFY THE BEST GRAPE VARIETY FOR THAT LAND 

[q unit=”2″ topic=”2″] HOW TO SURVEY A LAND BEFORE ESTABLISHING A VINEYARD

[a] 1- SATELLITE IMAGING

2- SOIL SAMPLES

3- GEOLOGICAL STUDIES 

[q unit=”2″ topic=”2″] AVERAGE TIMING DELAY FROM PLANTING VINES TO PRODUCING WINE

[a] VINES NEED AT LEAST 3 YEARS TO PRODUCE QUALITY FRUITS 

[q unit=”2″ topic=”2″] WAYS TO FUND CAPITAL COSTS

[a] 1- LOANS

2- INVESTORS

3- PUBLIC SUBSIDIES

4- TAX INCENTIVES 

[q unit=”2″ topic=”2″] COSTS ASSOCIATED WITH ESTABLISHING A VINEYARD

[a] 1- BUYING & PLANTING VINES

2- STAKES & WIRES

3- DRAINAGE & PIPE WORKS (if needed)

4- PROTECTION AGAINST WEATHER HAZARDS
(wind breaks, frost protection…)

5- PROTECTION AGAINST ANIMAL PESTS
(high fences, electric fences, netting…)

6- BUYING MACHINERY & EQUIPMENTS
(tractors, machines…)

7- IN DRY AREAS = IRRIGATION SYSTEMS

[q unit=”2″ topic=”2″] DOWNSIDE OF LOAN FINANCING

[a] INTERESTS + CAPITAL REPAYMENTS 

[q unit=”2″ topic=”2″] DOWNSIDE OF FINANCING THROUGH INVESTORS

[a] 1- CONCEDE PART OF PROFITS

2- MAY IMPOSE HIGH RETURN ON INVESTMENT

3- PROVIDE THEM WITH VOTING RIGHTS = LOSS OF CONTROL

[q unit=”2″ topic=”2″] VINEYARD MANAGEMENT COSTS
(definition)

[a] COSTS OF RUNNING THE VINEYARD 

[q unit=”2″ topic=”2″] 7 CATEGORIES OF VINEYARD MANAGEMENT COSTS
(main categories)

[a] 1- LABOUR

2- MACHINERY & FUEL

3- SUPPLIES

4- VINEYARD TREATMENTS

5- WATER

6- ELECTRICITY

7- INSURANCE & DEPRECIATION 

[q unit=”2″ topic=”2″] LABOUR COSTS ASSOCIATED ON VINEYARD MANAGEMENT
(4 key takes)

[a] 1-VARIES ACCORDING TOPOGRAPHY, SIZE & OTHER FACTORS

2- ORGANIC & BIODYNAMIC VINEYARDS ARE MORE LABOUR INTENSIVE

3- VINEYARDS FOR PREMIUM & SUPER PREMIUM WINES ARE MORE LABOUR INTENSIVE

4- HIGHLY MECHANIZED VINEYARDS ARE LESS LABOUR INTENSIVE

[q unit=”2″ topic=”2″] EXAMPLES OF TOPOGRAPHY INFLUENCING LABOUR COSTS

[a] VINEYARDS ON STEEP SLOPES
(ex: Mosel…)

[q unit=”2″ topic=”2″] THE LABOUR COSTS vs. CAPITAL COSTS TRADE OFF

[a] 1- WHERE LABOUR COSTS ARE LOW = LESS INCENTIVE TO INVEST IN CAPITAL INTENSIVE EQUIPMENTS
(ex: Chile)

2- WHERE LABOUR COSTS ARE HIGH = INVESTMENT IN MACHINERY BETTER OPTION
(ex: Coonawarra) 

[q unit=”2″ topic=”2″] SEASONALITY OF LABOUR COSTS

[a] 1- AT HARVESTING = HIRE TEAM OF PICKERS FOR HAND-HARVESTING

2- REST OF THE YEAR = SMALLER STAFF OF MORE EXPENSIVE WORKERS
+ MANAGER 

[q unit=”2″ topic=”2″] OTHER COSTS ASSOCIATED WITH LABOUR

[a] COSTS OF HIRING, TRAINING & RETAINING STAFF 

[q unit=”2″ topic=”2″] 3 EXAMPLES OF COSTS REGARDING VINEYARD SUPPLIES

[a] 1- MATERIALS FOR REPAIR TO TRELLISING

2- PRUNING SHEARS

3- GLOVES TO WORKERS

[q unit=”2″ topic=”2″] 3 ELEMENTS OF VINEYARD TREATMENTS

[a] 1- AGRO-CHEMICAL COSTS
(herbicides, fungicides, insecticides…)

2- PREVENTING FUNGAL DISEASES
(cost of own weather station
or access to government-run weather station)

3- ORGANIC & BIODYNAMIC GROWERS STILL NEED
TRADITIONAL TREATMENTS
(ex: sulfur, Bordeaux mixture…)

[q unit=”2″ topic=”2″] 3 EXAMPLES OF ELECTRICITY COSTS
ASSOCIATED WITH VINEYARD OPERATING COSTS

[a] 1- FOR IRRIGATION SYSTEMS

2- FOR BIRD SCARERS

3- FOR FROST PROTECTION 

[q unit=”2″ topic=”2″] 2 EXAMPLES OF VINEYARD INSURANCES

[a] 1- AGAINST FLOOD

2- AGAINST FIRE

[q unit=”2″ topic=”2″] DEPRECIATION
(Definition)

[a] THE REDUCTION IN THE VALUE OF AN ASSET OVER TIME, BASED ON ITS USEFUL LIFE 

[q unit=”2″ topic=”2″] WINEMAKING COSTS
(cost structure)

[a] 1- WINERY ESTABLISHMENT
(capital costs)

2- WINEMAKING OPERATING COSTS 

[q unit=”2″ topic=”2″] WINEMAKING OPERATING COSTS
(Definition)

[a] COSTS INVOLVED IN RUNNING THE WINERY 

[q unit=”2″ topic=”2″] 3 CATEGORIES OF WINERY ESTABLISHMENT COSTS

[a] 1- BUYING or RENTING THE LAND
TO BUILD THE WINERY

2- COSTS OF BUILDING THE WINERY

3- COSTS OF EQUIPMENTS
(presses, pumps, maturing vessels, bottling line…)

[q unit=”2″ topic=”2″] 3 WAYS OF FUNDING WINERY ESTABLISHMENT COSTS
(capital costs)

[a] 1- THROUGH LOANS/MORTGAGE

2- THROUGH OWNER OWN CAPITAL

3- THROUGH INVESTORS 

[q unit=”2″ topic=”2″] 4 MAIN ACTIVITIES INVOLVED IN WINEMAKING OPERATING COSTS
(active verbs)

[a] 1- MANAGING THE WINERY

2- PRODUCING THE WINE

3- MATURING THE WINE

4- BOTTLING & PACKAGING
THE FINAL PRODUCT 

[q unit=”2″ topic=”2″] 9 CATEGORIES OF WINEMAKING OPERATING COSTS
(costs structure)

[a] 1- GRAPE GROWING or FRUIT BUYING

2- LABOUR

3- MACHINERY & EQUIPMENTS
(running costs)

4- WINERY MATERIALS

5- WATER
(e.g. cleaning)

6- ELECTRICITY

7- MATURATION

8- PACKAGING

9- DEPRECIATION

[q unit=”2″ topic=”2″] 3 MAIN COSTS ASSOCIATED WITH MATURING WINE

[a] 1- AGING VESSELS COSTS

2- STORAGE SPACE COSTS + OVERHEADS (electricity…)

3- LOSS OF CASH FLOW
(money tied up in maturing stocks) 

[q unit=”2″ topic=”2″] OTHER COSTS IMPACTING WINE PRODUCERS’ PROFITABILITY
(5 main categories)

[a] 1- TRANSPORTATION

2- TAXES & DUTIES

3- SALES

4- MARKETING

5- INDIRECT COSTS

[q unit=”2″ topic=”2″] ROUTE TO MARKET
(Definition)

[a] HOW A BOTTLE OF WINE GETS FROM THE PRODUCER TO THE CUSTOMER

[q unit=”2″ topic=”2″] SUPPLY CHAIN
(Definition)

[a] THE NETWORK OF ORGANIZATIONS AND ACTIVITIES INVOLVED
FROM THE CREATION OF A PRODUCT
TO ITS DISTRIBUTION AND SALE TO THE FINAL CUSTOMER 

[q unit=”2″ topic=”2″] IN WINE INDUSTRY, 1st STAGE OF SUPPLY CHAIN

[a] GRAPE GROWING

[q unit=”2″ topic=”2″] CAPITAL COSTS
(Definition)

[a] MONEY SPENT BY A BUSINESS IN ACQUIRING, IMPROVING OR MAINTAINING LONG-TERM ASSETS SUCH AS LANDS, BUILDINGS & EQUIPMENTS

[q unit=”2″ topic=”2″] COSTS OF GROWING GRAPES
(structure)

[a] CAPITAL COSTS + OPERATING COSTS 

[q unit=”2″ topic=”2″] USE OF AIR FREIGHT FOR WINE BOTTLES
(Circumstances)

[a] 1- SPECIAL CIRCUMSTANCES
– Bottles for competitions
– Bottles for fairs

2- HIGH VOLUME WINES FOR WHICH IT IS IMPORTANT TO HAVE CONTROL OVER THE FINAL PRODUCT

3- IMPORTANT DEADLINES
(Beaujolais Nouveau in Japan) 

[q unit=”2″ topic=”2″] SEA TRANSPORTATION

[a] 1- CALLED “DEEP SEA”

2- CHEAPEST METHOD (Cost/distance)

3- CONTAINERISATION IS ESSENTIAL

4- DOWNSIDE = SLOW

[q unit=”2″ topic=”2″] CAPACITY OF THE DIFFERENT TYPES OF SHIPPING CONTAINERS

[a] 1- SHIPPING CONTAINERS = 9000 to 10000 Liters of bottled wines

2- FLEXITANK = 24000 Liters of bulk wine

3- ISOTANK = 26000 Liters of bulk wine 

[q unit=”2″ topic=”2″] DISADVANTAGES OF BULK TRANSPORTATION

[a] 1- IF INFERIOR TO 15000 Liters = no cost advantages

2- ONLY POSSIBLE FOR LARGE VOLUME OF THE SAME WINE

3- NO CONTROL OVER BOTTLING PROCESS

4- NO CONTROL OF QUALITY OF FINAL PRODUCT

[q unit=”2″ topic=”2″] IMPORTATION COSTS

[a] 1- CUSTOM DUTIES & TAXES

2- LABELLING LAWS 

[q unit=”2″ topic=”2″] MAIN DIFFERENCES IN LABELLING LAWS

[a] 1- E.U. abv = nearest whole or half

2- USA = 1.5% VARIANCE ALLOWED

3- USA + MUST DISPLAY HEALTH WARNING 

[q unit=”2″ topic=”2″] ESTATE PRODUCER
(Definition)

[a] PRODUCER WINE FROM HIS OWN VINEYARD(S) OWNED OR LEASED

[q unit=”2″ topic=”2″] GROWERS
(Definition)

[a] 1- CHOOSE NOT TO PRODUCE OWN WINE

2- FOCUS ONLY ON GROWING GRAPES 

[q unit=”2″ topic=”2″] GROWER PRODUCER
(Definition)

[a] PRODUCE WINE FROM THEIR GRAPES AND SELL IT TO MERCHANTS
WHO MATURE AND SELL IT 

[q unit=”2″ topic=”2″] MERCHANTS
(Definition)

[a] BUY IMATURE WINES & GRAPES TO MAKE WINE, MATURE IT
& SELL IT UNDER MERCHANTS’ NAME 

[q unit=”2″ topic=”2″] ADVANTAGES OF USING DISTRIBUTORS

[a] 1- DEAL WITH LOCAL REQUIREMENTS

2- MARKET KNOWLEDGE

3- ESTABLISHED CLIENT LIST

4- DEALS EFFECTIVELY WITH LOGISTICS

5- PROVIDE INSURANCES

6- DISTRIBUTOR CARRY THE RISK OF LOSS/DAMAGES TO WINE 

[q unit=”2″ topic=”2″] DISADVANTAGES OF USING DISTRIBUTORS

[a] 1- CHARGE FEES (called Margin)

2- HORECA DISTRIBUTORS CHARGE HIGHER MARGIN

3- DISTRIBUTOR SALES & MARKETING MAY NOT BE IN LINE
WITH PRODUCER STRATEGY

4- DISTRIBUTOR MAY DROP LOW PERFORMING WINES

[x] GOOD JOB!!

[restart]

[/qdeck]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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