Pricing

16 04 2006

I’ve said my piece on hotel room pricing (1 and 2)and car rentals, but there’s two other things that get me about pricing in the US:

  1. Exclusive pricing
  2. Wine pricing

By “exclusive pricing” I mean the way that almost all US establishments charge you MORE than the ticketed price, which means you pay way more than you expect to. This includes supermarkets, restaurants, and of course hotel rooms and car rentals.

Everything includes a ‘little extra’ for taxes and other charges of various sorts and values. In Australia, we have to ticket the ‘inclusive’ price. So if an item has taxes applied to it, those taxes are included in the price to the consumer and so ‘what you see is what you pay’. The tax component is a separate line item on the bill, but it is part of the ticketed price. If you go to a restaurant in Australia and the menu item is $14.95, then $14.95 is what you’ll pay.

Wine pricing is in another realm altogether, and our current and previous experiences in the US would indicate that we get absolutely ripped off at home. Let me explain… There’s an Australian wine that we like (Penfolds Bin 389), but which we rarely buy except for special occasions because it’s not a cheap wine by any stretch of the imagination. Over the years the price has climbed steadily and last I looked it was hovering around the $40 mark in a discount bottle shop.

Now, in previous years we have purchased this same bottle of wine, same vintage etc. in discount stores (like Costco) in the US – for less than we pay in Australia!

Yesterday we went for a drive from Manistee, Michigan to the Mackinac Bridge in the far north of the ‘mitten’. We drove through some gorgeous little towns and villages, and were about as far away from Australia as you can get. One of the dots on the map we drove through was a village called Alanson, and as we went through I saw a sign on the outside of the liquor store that advertised Penfolds Thomas Hyland Chardonnay at $8.98 (US). The Thomas Hyland range is not bad and that was a good price, so we decided to stop there on the way back and see if they had any Shiraz or Cabernet in that range.

They didn’t have any Thomas Hyland reds, but they DID have a couple of Bin 389s and some Bin 407s and some other Penfolds reds. So obviously we looked at the price of the Bin 389 and found that it was ticketed at $21.52 US, which roughly translated to around $30 Australian! We bought two bottles TO TAKE HOME TO AUSTRALIA with us because there is no way we can buy it that cheap there.

I talked to the store owner and he said he marked up his buying price by 25%, which means he bought it for about $15 US, which means that it probably landed in the US for between $5 and $10 a bottle after you take into account all the middlemen. And this wasn’t a mistake for a couple of bottles lurking in the back room – this was the current (2001) vintage and he’d only priced it recently.

I decided to check one of the Australian discount liquor stores online this morning – Vintage Cellars have the Bin 389 2001 vintage out for $49.99 AU a bottle!!! That’s $36.42 US according to http://www.xe.com/. And they have the Thomas Hyland Chardonnay out for $22.99 AU a bottle – $16.75 US. Meantime, this guy is selling Thomas Hyland for less than $9 US a bottle, and Bin 389 for less than $22 US a bottle.

This is not an isolated instance – we’ve encountered it before. What I want to know is WHY an Australian living in Australia has to pay much more for Australian wine, than someone living in Alanson, Michigan, or Monterey, California, or wherever… It’s nothing but a blatant rip-off by our wine companies and over-taxing government.