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Joe Ciatti: It s a natural happening in agricultural business cycles whenthere s a supply of raw materials that s really long, the marketwill use up the fruit available and not plant for quite a while. People think a big crop will take us out of where we are today, butwe need to plant. Wineries are trying to secure supply withlong-term grape contracts, planting grapes or getting growers toplant for them. Strong wineries are trying to buy vineyards in theright places. It s a big change. It all happened in the last eight to ninemonths, and it will probably be here for six to eight years. It seasy to say wineries have to raise casegoods prices. It isdifficult to do that in practice, but in reality it will happen. Ithink that s what a lot of wineries are doing in telling growersthat they are taking grape prices up severely. There s a lot ofgreed on both sides, with some stretching prices. How much of the supply and pricing issue is determined by thetarget bottle price of a wine program? Bill Pauli: Brand owners and wineries of small and mid-size, and negociantsare working on very tight margins per case and are struggling tofind bulk wine that allows for some margin per case. Do they blenddown, if they can find bulk wine available? Do they look off shore?I suspect we will see some brands forced to do those things tomaintain availability of product or raise prices to slow growthwhile waiting for the 2012 crop. Some larger wineries with multiple brands may move to differentproduct mixes while still maintaining overall case sales, shelfspace, and distribution. Price points will be driven bycompetition and the economy along with consumer preference. Bulk wine supply is challenging for certain select appellations forhigh-end red wines such as cabernet sauvignon, pinot noir andzinfandel. However, supply is not as much of an issue as is theprice per gallon that the wineries are willing to pay. For expanding or growing a brand, purchasing an existing brand orcompleting acquisitions in progress, finding grape or bulk-winesupply at reasonable prices for existing brand price points isa challenge. The e-commerce company in China offers quality products such as RFID Animal Tag , China Disposable RFID Tags, and more. For more , please visit RFID Smart Cards today!
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