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Title : Cellar Door and Farm Gate Pricing
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Cellar Door and Farm Gate Pricing

; Once upon a time, winemakers and farmers used to sell their goods at discounted prices at the place of production. This made good sense; by cutting our the middlemen and selling directly to consumers, business owners saved a lot of money in terms of distribution costs, additional margins, and so on. So, enterprising consumers could go directly to these outlets and buy cheap goods while the producer saved costs and kept all the profit to themselves. Everybody wins.

Somewhere along the line this changed. What seems to have happened is that 'gourmet touring' became a popular tourist activity. Tourists jumped in their cars and drove around the countryside sampling and buying the fine wares. Saving money was no longer the concern; rather, it was all about the experience. Buying at the farm gate was "authentic" and fun and a good excuse for tooling around the countryside. Once this transformation happened, folks at the farm gate started to realise that these new visitors had very low demand elasticity. My theory is that there are two reasons for this: the first is that tourists, by and large, are more profligate than they are in their day-to-day lives. They're on holiday, they're there to have fun, not to penny-pinch. The second reason is that gourmet touring, as an activity, can only really be justified to oneself if it actually results in some purchases. The result of all this is that farm gate and cellar door prices are now usually as high or higher than the price of the same products in shops, despite costs for packing, freight, rent, the middleman's cut, and goodness knows what else.

Case in point: we were just in Tasmania for a two-week road trip (very nice, thanks for asking) and it was cherry season. The cherries at the farm gate were fantastic, but they also cost $14-$18 for a kilo. By way of comparison, export grade Tasmanian cherries at the Queen Victoria market are $14 for a kilo; the large juicy ones that we bought were nearly as good for only $8. We also did some light wine touring, and a bottle of sparkling wine that costs $21 at Dan Murphy's in Melbourne was $24 at the cellar door. But we bought some anyway... somehow it would have felt wrong to taste the wine in Piper's Brook, then go and buy it at Dan Murphy's. We also paid $17 for a 150 gram washed-rind cheese at the farm gate in Bruny Island. It was very good, but paying that much for cheese anywhere is just insane, especially when all the distribution costs are non-existent.

There's nothing wrong with any of this, by the way. It's just the free market in action, and nobody's being dishonest. I do wish I was around for the good old days of cheap prices at the farm gate, though. I can't really enjoy wine touring under these conditions, it just makes me feel like a chump.

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