NZ wine sells at half the price in US

By Yvonne Tahana

Oyster Bay winemaker says Kiwis should blame taxman for huge difference in cost.

Kiwis, it seems, pay a lot more than Americans for Oyster Bay, one of the world's most admired wine brands. Photo / Getty Images
Kiwis, it seems, pay a lot more than Americans for Oyster Bay, one of the world's most admired wine brands. Photo / Getty Images

The popular New Zealand wine Oyster Bay is being sold at home for nearly double the price seen in the United States - but the winemaker says Kiwis should blame the taxman for the difference.

Two pictures of the 2012 sauvignon blanc were taken within 24 hours of each other by the NZ Herald.

One of the bottles was on sale in Mt Eden Countdown in Auckland for $25.99, while the other was on sale for US$11.99 - the equivalent of NZ$14.30 - at Eastport Liquors from Annapolis in the state of Maryland.

Eastport Liquors wine manager Glenn Norris said the wine was popular and he'd sold 40 cases in the past year. "I've got five bottles on the shelf left ... I can tell you for a little store like ours that's pretty darn good."

He was astonished by the New Zealand price. "Wow. I don't know why it would be any cheaper here than there, it doesn't make any sense to me."

He said his purchase price tended to float, although the worst-case retail scenario - including taxes - would be US$16, or $19.08.

Graeme Lord, a spokesman for Oyster Bay's owner, the Delegat's Group, said Kiwis weren't being ripped off.

Usually the wine retailed in New Zealand for about $20, and could be sold on special for $14.99, he said.

Mr Lord claimed the Herald's US example was likely to be a discounted price rather than its everyday price, which he said was usually closer to $18.

The main element driving the differences in price was taxes - GST of 15 per cent plus excise and the Alcohol Liquor Advisory Council levy. "It's the world we live in. The Government sets taxes at whatever rate and retailers will set prices at whatever they believe is the right price."

He claimed the tax element of the US price was 43c, but in fact the Maryland state tax for alcohol is 9 per cent - US$1.08 on the bottle of Oyster Bay. Federal tax accounts for a further 21c.

Countdown media spokesman Luke Schepen would not reveal what the retail margins were on Oyster Bay but said the price on the shelf reflected what it paid for the product and the costs of running the business.

Across 20,000 products it made 3c in every dollar.

"We always try to get the best deal for customers ... if we think we're perhaps not getting a good deal perhaps we'll try and get a better deal."

New Zealand Winegrowers chief executive Philip Gregan said the US market was the largest in the world and worth $250 million a year to New Zealand growers.

Mr Gregan was confident "in general" that Kiwis weren't paying more across the board for New Zealand wine here than consumers were paying overseas.

Oyster Bay was one of eight New Zealand offerings to make it on to an international top-50 list of the world's most admired wine brands last year.


Oyster Bay sauvignon blanc

$25.99: Mt Eden Countdown, Auckland
$14.30: Eastport Liquors, Annapolis
(both prices in NZ dollars)

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Know of any other price disparities?
Email: newsdesk@nzherald.co.nz

- NZ Herald

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