Answer by: Roger C. Bohmrich, MW
This is a great question about the economics of wine, but we need perhaps to refine it to come up with a generally relevant answer to some of your points.
First, let's break down "manufacturer" into two tiers (which can, of course, be combined in the real world): grape grower and winery or producer.
Next, "dealer" should probably be divided again into two: wholesaler and retailer. The organization of the trade differs by law and practice according to individual states, and the wholesale and retail functions cannot be combined in almost all states.
On a raw, unweighted basis, the profit margin on a bottle of U.S. wine might theoretically be allocated as follows, as a % of the retail price:
Grape grower - 25%
Winery - 45%
Wholesaler - 15%
Retailer - 15%
While the profit seems to be in the hands of the grower/maker, when you take into account assets required to grow/make the product, such as vineyards and winery facilities, the % profitability is roughly similar at each of the tiers. Also, the producer invests all or most of A&P (no common allocation applies). In terms of taxes on table wine of 14% alcohol or less, the Federal excise tax is $1.07/wine gallon or $0.21/750 ml bottle and state excise rates vary from $0.20 to 2.25/wine gallon.
About the Expert:Roger has enjoyed a lengthy career in the wine trade, and he last served as a senior executive with a major national importer. In 2006, he launched Millesima USA, a retail entity affiliated with Europe's leading fine wine mail order company. Roger became one of America's first Masters of Wine in 1993, and he has been very active as an educator and speaker at wine festivals and conferences. He hosts a community television program entitled "Wine's Simple Pleasures," and is currently working on a book of original recipes and wine pairing solutions. Visit Roger C. Bohmrich, MW's website: MILLESIMA USA LLC
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