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bifter
Master Of Malts
Joined: 10 Apr 2012
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Location: East Lothian
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 Posted: Wed Jan 22, 2014 8:24 pm Post subject: Diageo wholesale prices to rise? |
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Erik Burgess of the New Zealand Whisky Company and the Whiskysite Leiden had an exchange on Facebook today. They seem to suggest that Diageo's wholesale prices are set to rise next month by 10%-17%.
https://www.facebook.com/whiskysite.leiden?fref=ts
I contacted him to confirm this will affect UK also. It may take a while to feed through but this could mean some painful hikes on the Diageo range!
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"Whisky is liquid sunshine."
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Quaich1
Master Of Malts
Joined: 21 Apr 2012
Posts: 5749
Location: Ontario, Canada
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| Posted: Wed Jan 22, 2014 9:14 pm Post subject: Re: Diageo wholesale prices to rise? |
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| bifter wrote: | Erik Burgess of the New Zealand Whisky Company and the Whiskysite Leiden had an exchange on Facebook today. They seem to suggest that Diageo's wholesale prices are set to rise next month by 10%-17%.
https://www.facebook.com/whiskysite.leiden?fref=ts
I contacted him to confirm this will affect UK also. It may take a while to feed through but this could mean some painful hikes on the Diageo range! |
Olie, you are talking about 15 single malts in their line including Lagavulin and 9 blends including Johnnie Walker. That could spell trouble for Mr. Consumer.
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albo
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Joined: 22 Mar 2011
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| Posted: Thu Jan 23, 2014 10:15 am Post subject: |
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| I'm with you there Murray, it will make some of their standard drinks rather expensive, given these are wholesale price hikesm the retail hikes are potentially going to be even greater c20% |
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bifter
Master Of Malts
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| Posted: Thu Jan 23, 2014 11:22 am Post subject: |
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| albo wrote: | | I'm with you there Murray, it will make some of their standard drinks rather expensive, given these are wholesale price hikesm the retail hikes are potentially going to be even greater c20% |
I was wondering about that. Assuming wholesale price includes duty but not VAT and there's a margin for the retailer, the retail impact could be lower as a percentage. Either way the rises will be above inflation and incomes are not even keeping pace with that.
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"Whisky is liquid sunshine."
[George Bernard Shaw] |
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albo
Master Of Malts
Joined: 22 Mar 2011
Posts: 1888
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| Posted: Thu Jan 23, 2014 11:52 am Post subject: |
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| bifter wrote: | | albo wrote: | | I'm with you there Murray, it will make some of their standard drinks rather expensive, given these are wholesale price hikesm the retail hikes are potentially going to be even greater c20% |
I was wondering about that. Assuming wholesale price includes duty but not VAT and there's a margin for the retailer, the retail impact could be lower as a percentage. Either way the rises will be above inflation and incomes are not even keeping pace with that. |
How many retailers do you think will be looking to do the best by the consumer though? |
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GBrough
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Joined: 21 Jan 2014
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| Posted: Thu Jan 23, 2014 5:42 pm Post subject: |
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Glenmorangie does a pretty good job of keeping with the consumer.
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The Laga 16.
It even tastes like an ashtray-WM |
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bifter
Master Of Malts
Joined: 10 Apr 2012
Posts: 1403
Location: East Lothian
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| Posted: Thu Jan 23, 2014 10:05 pm Post subject: |
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| albo wrote: | | bifter wrote: | | albo wrote: | | I'm with you there Murray, it will make some of their standard drinks rather expensive, given these are wholesale price hikesm the retail hikes are potentially going to be even greater c20% |
I was wondering about that. Assuming wholesale price includes duty but not VAT and there's a margin for the retailer, the retail impact could be lower as a percentage. Either way the rises will be above inflation and incomes are not even keeping pace with that. |
How many retailers do you think will be looking to do the best by the consumer though? |
What I mean is that 17% at wholesale will be a lower fraction at retail.
For example, take an imaginary malt, wholesale price £20, retail price £30 - £5 margin to the retailer, £5 VAT. If the wholesale price rises 10% to £22 and the retailer keeps the same £5 margin, the new retail price is £32.40 once VAT is added. That £2.40 rise is only an 8% increase at retail.
Even if the retailer increases his margin at, say, 2.5% to account for inflation that makes the bottle £32.55 or a 8.5% rise at retail.
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albo
Master Of Malts
Joined: 22 Mar 2011
Posts: 1888
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| Posted: Thu Jan 23, 2014 10:11 pm Post subject: |
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| bifter wrote: | | albo wrote: | | bifter wrote: | | albo wrote: | | I'm with you there Murray, it will make some of their standard drinks rather expensive, given these are wholesale price hikesm the retail hikes are potentially going to be even greater c20% |
I was wondering about that. Assuming wholesale price includes duty but not VAT and there's a margin for the retailer, the retail impact could be lower as a percentage. Either way the rises will be above inflation and incomes are not even keeping pace with that. |
How many retailers do you think will be looking to do the best by the consumer though? |
What I mean is that 17% at wholesale will be a lower fraction at retail.
For example, take an imaginary malt, wholesale price £20, retail price £30 - £5 margin to the retailer, £5 VAT. If the wholesale price rises 10% to £22 and the retailer keeps the same £5 margin, the new retail price is £32.40 once VAT is added. That £2.40 rise is only an 8% increase at retail.
Even if the retailer increases his margin at, say, 2.5% to account for inflation that makes the bottle £32.55 or a 8.5% rise at retail. |
Ok fair enough.
But still let's get back to the basic fact here, 8% 10% 15% 20% which ever way you cut it, it's not good for us. |
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bifter
Master Of Malts
Joined: 10 Apr 2012
Posts: 1403
Location: East Lothian
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| Posted: Thu Jan 23, 2014 10:44 pm Post subject: |
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| albo wrote: | | bifter wrote: | | albo wrote: | | bifter wrote: | | albo wrote: | | I'm with you there Murray, it will make some of their standard drinks rather expensive, given these are wholesale price hikesm the retail hikes are potentially going to be even greater c20% |
I was wondering about that. Assuming wholesale price includes duty but not VAT and there's a margin for the retailer, the retail impact could be lower as a percentage. Either way the rises will be above inflation and incomes are not even keeping pace with that. |
How many retailers do you think will be looking to do the best by the consumer though? |
What I mean is that 17% at wholesale will be a lower fraction at retail.
For example, take an imaginary malt, wholesale price £20, retail price £30 - £5 margin to the retailer, £5 VAT. If the wholesale price rises 10% to £22 and the retailer keeps the same £5 margin, the new retail price is £32.40 once VAT is added. That £2.40 rise is only an 8% increase at retail.
Even if the retailer increases his margin at, say, 2.5% to account for inflation that makes the bottle £32.55 or a 8.5% rise at retail. |
Ok fair enough.
But still let's get back to the basic fact here, 8% 10% 15% 20% which ever way you cut it, it's not good for us. |
It's pretty galling, especially given previous increases. Laga 16 was under £40 only a couple of years ago, Talisker was less than £30 so prices have already risen ~20% on some of the range in that period.
Overall whisky sales in the UK are down 12% in the last five years but it would seem the international demand is such that they can get away with this. Chuck in their dodg.. er, efficient tax arrangements and they must be absolutely coining it in!
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bifter
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albo
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Joined: 22 Mar 2011
Posts: 1888
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| Posted: Sun Jan 26, 2014 8:34 pm Post subject: |
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I'm glad for them. My hand will stay out of my pocket all the more post rise |
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