PRICE’S FORMULATION OF THE GRAFTED VINES
In the European Union nearly 350/400 million grafted vines are produced every year. Italy holds the second place after France, with roughly 130-150 million plants, of which 35/40 million are purposed to export. Pricing policies for grafted vines in Europe are based on many different factors as opposed to the United States. This happens for a substantial reason: in the USA 95% of grafted vines are produced on preorder, while the EU tends to produce exclusively on a sales forecast basis. This because European winegrowers make their purchase decisions on the variety/clone/rootstock combinations at the last moment, often just a few days before implantation. In the US the price is generated on a manufacturing cost basis. Therefore, depending on the required variety/clone/rootstock combination and on the related production difficulties, vines are marketed at prices ranging from $3 to $3.80, while for resistant varieties, that are patented and charged with royalty fees, the price could reach $6.
In Europe, on the contrary, factors that have a major influence on the price of grafted vines are:
- supply and demand for each variety;
- trends on the grape and wine markets (if the grape harvest season starts with falling prices, the prices of the vines will drop as a consequence);
- allocation of vineyard restructuring subventions under the WINE-CMO policy and its prolongations;
- volume of the single orders;
- type of rootstock (for “easy” rootstocks, such as 3309, 101.14, SO4, nurseries will tend to offer lower prices, whereas for “difficult” ones, such as the 140Ru, 41B, 110R, the price will be higher);
As a result, the price differential will be very wide and often won’t match the actual manufacturing costs.
The price of grafted vines shows a range between €1.20 and €1.80, including both the varieties not in demand and the most attractive ones, falling within the norm of the Italian market. The same variety may then undergo similar price fluctuations from one year to the next, simply on a supply/demand basis.
Obviously, during economic downturns, the selling price often doesn’t even cover the production costs.