The international trade in alcohol plays an important role in the global economy. Alcohol is exported and imported between countries in different ways and includes different types of alcoholic beverages such as beer, wine, vodka, whiskey, rum and many more. However, there is no denying that the international trade in alcohol is determined by many factors, such as demand, raw material costs, customs duties or margins of producers and sellers.
What are the main factors affecting the price of alcohol in international trade?
Alcohol in international trade
Alcohol is the only commonly used intoxicant that is not subject to specific prohibitions and agreements regulating trade and trade. Rather, alcohol is generally treated as a common commodity in international trade, and in many countries is subject to even fewer laws and regulations than other foodstuffs.
In recent decades, certain dominant trends in the international trade in alcohol have been noticeable. First of all, the production and distribution of alcohol is becoming an increasingly oligopoly. It is dominated by a small number of multinational corporations that control much of the branding and distribution of alcoholic beverages around the globe. Globalization is also favored by the dynamic development of digitization and social media, which are now becoming the main channels for marketing activities.
Many market researchers point to a fairly strong lobby of corporations trading in alcohol in various parts of the world. As part of taking care of their own interests, industry associations try to protect their investments, and are also active in the political and social field in order to win the most favorable conditions for business activity. This applies to both domestic (local) and international markets.
Although large corporations and well-known brands dominate the global alcohol markets, in recent years a new, bottom-up (consumer-driven) trend has emerged. Namely, consumer attention has turned towards craft spirits and local products that are not produced on a large scale. Due to the growing demand for craft alcohols, the export of less commercial goods has also increased, which is an opportunity for smaller producers from different parts of the world to develop their own business. Although international alcohol trade is still dominated (and probably will be for a long time) by big brands, there is no denying that a new trade trend is becoming noticeable.
Significant aspects of international alcohol trade
International trade in spirits plays an important role in many national economies and accounts for a large proportion of the overall food trade. The most important aspects of the international alcohol trade include:
- Export and import
Countries can export their own alcoholic beverages to other countries and import alcohol from other regions. This makes alcohol a global product that crosses borders and is available in different parts of the world. - Bilateral trade
Many countries trade bilaterally, with one country exporting alcohol to another and importing other products in return. For example, France can export its wine to the United States and import American whiskey in return. - Brands and regional specialities
International trade in alcohol also includes well-known branded alcohol production. Many countries are famous for the production of specific high-quality spirits, such as French wine, Scotch whiskey or Mexican tequila. Customers all over the world look for these specialties and import them to their countries. - Regulations and duties
International alcohol trade is subject to regulations and duties. Each country has its own regulations regarding the import and export of alcohol, such as required certifications, quantity limits and taxes. These regulations and tariffs can affect the price and flow of alcohol trade. - International fairs and exhibitions
Many international fairs and exhibitions are dedicated to the alcohol industry, where producers, importers and distributors meet to promote their products, establish business contacts and conclude contracts. Such events are important for the development of international trade in the alcohol sector. - Consumer tastes and preferences
International trade in alcohol is also shaped by differences in consumer preferences. Different cultures and countries have different tastes and traditions related to alcoholic beverages. This affects the demand for specific types of alcohol and affects international trade.
What influences the price of alcohol in international trade?
Alcohol prices in international trade are determined by many factors. Here are some of the most important factors that can influence their formation:
- Tax policy of states
Differences in alcohol taxes between different countries can significantly affect prices. Higher taxes on alcohol typically lead to higher prices for consumers. - Regulations
Differences in the regulation of alcohol production, sale and distribution between countries can affect prices. Some countries may have stricter regulations that increase production and distribution costs, which may result in higher prices. - Raw Materials
The cost of raw materials used to produce alcohol, such as grain, grapes and malt, can affect prices. The prices of energy resources are no less important: the more expensive the energy needed to produce and transport raw materials or products, the higher the final price for the consumer. Fluctuations in raw material prices in world markets can cause fluctuations in alcohol prices. - Currency exchange
Exchange rates between countries can affect the price of alcohol in international trade. If one country's currency increases in value compared to another country's currency, the products exported from that country may become more expensive for importers. - Transport costs
Alcohol transport costs, such as sea freight or road freight costs, may affect prices. If transport costs increase, this can lead to higher alcohol prices for consumers, especially if it is imported from another part of the world. - Demand and supply
General trends in the demand and supply of alcohol in international markets also affect prices. If the demand for alcohol in a country increases, prices may go up. Similarly, if alcohol supply is limited, prices may be higher.
How to buy cheap alcohol from a wholesaler?
If you are looking for ways to buy cheap alcohol from a wholesaler, then we have some suggestions for you that may be helpful. First of all, take the time to research the market and compare price offers. Check not only the different distributors in your country, but also foreign wholesalers. It may turn out that foreign purchase of more products will be more profitable.
Secondly, buy in bulk, increasing the size of the order. The larger the order, the better price you can usually get. If you run a business whose demand for food products is not limited only to alcohol (e.g. catering activities, organization of parties and events), then look for a food wholesaler that sells alcohol and other food products.
Look out for promotions - track and observe promotional offers and wholesalers. For this purpose, it is worth subscribing to the newsletter of selected companies or following their social media channels.
Pay attention to seasonality! Depending on the season, some types of alcohol may be cheaper. For example, after the Christmas or New Year season, there are often discounts on alcohol that has not been sold.
Shop in major cities or distribution centers. Alcohol prices may vary by location. In larger cities or distribution centers there may be more competition and a greater choice of wholesalers, which may lead to lower prices. Larger wholesalers will also be able to offer more favorable prices to their customers.
Establish relationships with wholesalers. If you plan to buy alcohol from a wholesaler on a regular basis, it's worth establishing a good relationship with your suppliers. This can lead to better prices, access to exclusive offers or priority distribution of limited alcohol batches.
Are you looking for a partner for wholesale alcohol purchases? Therefore, contact us and we will prepare an offer optimally tailored to your needs!