Exportation of champagne to Canada

Thèmes abordés

Champagne, Moet et Chandon, Canada, exportation, certificat, traçabilité, taxe, droit de douane

Résumé du document

In this report we will figure out all the requirements in order to make a suitable advice to export Champagne to Canada. One of the most well-known products of France is wine. Champagne is one of the most popular and luxury products in this segment. If we take into consideration the market and spending power, we can conclude that Canada is a great opportunity to export this product to.

In developing countries, there is a market for luxury products, especially in times where the economy is improving and the upper- class and general spending power of the population is going up. After quitting the economic recession, there are new opportunities to export luxury products. Furthermore we discovered that 7% of the USA inhabitants consume Champagne. In Canada, this is 0%. We can conclude there is a huge possibility to introduce champagne to this market too.

We decided to export the Brut imperial magnum 1.5l in Coffret Bois, champagne of MOET ET CHANDON (68, 00 euro). After a market research, we found out that there are similar bottles of champagne on the Canadian market in the same price range, between 80 CAN DOLLAR and 116 CAN DOLLAR. This price range in Euro was between 62.38 euros and 90.45 euros. The price at which we could buy the champagne was without taxes 56.86 euros (minus a VAT of 19.6%). If we take a sale margin of 30% of high-quality champagne, the price for which we can buy the champagne at the factory is 43.74 euros.

Extraits

[...] This means 100 financial days, a real interest rate of 1.0471 we do have a loss of 126 euro, if the bank fees are 50 euro. When we would like to have an option to call the arranged exchange rate, it will cost us 25 euro. According to the situation today, the exchange rate is higher, so we would get less money. So we were right to do the hedging, because today we would have a bigger loss. When the currency rate should be lower, it was a disadvantage if we didn't took an option. [...]

[...] It got the highest rate of ranks according to Coface. We saw that there are a lot of documents which are required, but in general, they were quite easy to fulfill. The taxation in Canada is very low. This is a great advantage, because the difference in taxation lowers the price of our product. We got from Coface financial help to start up our export of Champagne to Canada. As you can see, our forecasts seem to be rather encouraging. [...]

[...] So we have a kind of ‘reserve' without paying a fee which is too high. When our business is doing well and we need more money, we have easily access to an additional amount of money. But in order to follow this strategy, we should use at least 90% of our otherwise Coface won't accept it. Proposal Using Incoterms We did an extensive calculation in order to give a suitable proposal. We found out which Incoterms we should use, and what the price of the transport is. [...]

[...] The HS number system is internationally recognized and the same all over the World. Therefore, it's an international reference number we can use to trade. Country rating In this report we will describe two kinds of country ratings: Coface country rating and Ducroire country rating. Coface country rating We can see that Canada is an extremely secure country to export to. With the maximum grade, for both the country rating as well as the business environment rating, the risks for exporting are very low. [...]

[...] Newfoundland: Harmonized sales tax (HST, including the Goods and Services Tax of is levied at a rate of 13% of the duty paid value. Only the GST component of is due at importation. Northwest Territories: Goods and services tax (GST) is levied at a rate of of the duty paid value. Nova Scotia: Harmonized sales tax (HST, including the goods and services tax of is levied at a rate of 13% of the duty paid value. Only the GST component of is due at importation. Nunavut: Goods and services tax (GST) is levied at a rate of of the duty paid value. [...]