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October 2017 WINES&VINES 57 PRACTICAL WINERY & VINEYARD BARRELS Inc.'s 2016 Pricing Catalog offered a "3% dis- count for all Rousseau barrel orders placed by April 1, 2016, and delivered by June 15, 2016. Net 30 days." These types of discounts are "early delivery" discounts, while keeping in mind there is also an early payment component since the 30-day payment window follows the earlier delivery date. The winery will receive the dis- count if their order is placed and paid for within 30 days of the earlier deadline. Bouchard Cooperages, representing the coopers Billon and DAMY, grants a €50 per barrel discount (6%) for orders placed by April 15 and delivered by July 1. The standard for payment is, again, 30 days after delivery, though some leeway is allowed. Barrels are typically delivered at the end of summer, just before the grape harvest begins. Given individual differences across coopers, we must make some simplifying assumptions, so we present costs for four basic delivery and payment options. The first is what we call the "standard": delivery in August and payment in September (the ordering window ranges from late April to July). Alternatively, wineries could theoretically wait and order after the standard timeframe: order in August for delivery in September and payment in October. Due to harvest timing, ordering after this time is very uncommon, except for wineries more fo- cused on limiting excess barrels. This is what is called the "regular delivery, late payment" option. Conversely, if taking advantage of the early deliv- ery discount, wineries could order by April 1 and pay immediately or pay 30 days after delivery (in our context, pay in April or Septem- ber). These options are "early delivery, early pay- ment" and "early delivery, standard payment." Note that there are two impacts on total cost: taking advantage of the early delivery discount and exchange rate volatility at time of payment. Our estimates assume a 5% early discount rate, a mid-range estimate for savings by early delivery orders. € 1,000 € 900 € 800 € 700 € 600 € 500 € 400 € 300 € 200 € 100 0 PRICE (IN EUROS) FOR TARANSAUD REF 102 BARREL OVER 15 YEARS 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 The price of French oak barrels, regardless of currency, has increased steadily over the past 15 years. Year