I agree that prior to last year, as a buyer, you were locking in your price and the retailer - not you - was taking the tariff risk. And I think TW should have honored the price rather than just giving you the choice to pay up or cancel.Mattstolz wrote: ↑June 24th, 2020, 3:32 am
ah I get you. I still think as a buyer, prior to last year, you were hedging against a possible tariff by buying the 2017s, and the retailer was taking that risk, because as a buyer I had locked in MY price. this year its a totally different ballgame because the opposite has happened where retailers have contingencies in the contracts in case of possible tariffs. I see where you're coming from, I think we're just saying it slightly differently maybe. haha. (for the record, my 2017 futures were with Total, so they DID try to pass that risk off on me, and I cancelled them because I disagreed with that based on my same thinking. the contract at that point didn't say anything about it so I thought that should have been on them at that time)
But again, protecting yourself by shifting the risk to the retailer (or them protecting themselves by shifting it to you) is not the same thing as eliminating the risk for everyone in the supply chain by using deal structure or hedging to lock everyone's cost in. My original point that you quoted a post or two ago was that almost everything that might change the price - currency rates, shipping costs, storage costs, and of course the price everyone up and down the chain is willing to pay/accept for the wine itself, can be locked in/hedged so that the risk for EVERYONE of those costs changing between 2020 and 2022 is eliminated, but tariffs are the exception and there is no way to lock them in or hedge them. So SOMEONE has to bear the risk of having to pay more than originally contemplated to cover any new or increased tariff, without knowing two years in advance what that tariff will be.