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Taboo Absinthe: An opportunity to export to the US

Prepared for BASM 530 by Tess Kitchen, Adam Shaw, Esther Ung. Taboo Absinthe: An opportunity to export to the US. The Opportunity. US ban on absinthe lifted in 2007 No North American absinthe brands currently for sale in US

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Taboo Absinthe: An opportunity to export to the US

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  1. Prepared for BASM 530 by Tess Kitchen, Adam Shaw, Esther Ung Taboo Absinthe:An opportunity to export to the US

  2. The Opportunity • US ban on absinthe lifted in 2007 • No North American absinthe brands currently for sale in US • Okanagan Spirits' Taboo Absinthe developed in 2007; sold exclusively in Canada • Brand recognition from being a supplier for the 2010 Olympics

  3. Contents • The company & the product • The market • Competitive advantage • Potential constraints

  4. Okanagan Spirits • Established 2004 • Received recognition as first-class producer within 3 years • Products made from local produce; no additives • Taboo Absinthe • Yes, it’s legal! • Earned a silver medal at the 2007 World Spirits Competition

  5. Target Market UNIVERSITY OF BRITISH COLUMBIA

  6. Why USA?

  7. Why Washington State? UNIVERSITY OF BRITISH COLUMBIA

  8. Trends UNIVERSITY OF BRITISH COLUMBIA

  9. Trends UNIVERSITY OF BRITISH COLUMBIA

  10. Trends UNIVERSITY OF BRITISH COLUMBIA

  11. Trends UNIVERSITY OF BRITISH COLUMBIA

  12. Marketing UNIVERSITY OF BRITISH COLUMBIA

  13. Promotion UNIVERSITY OF BRITISH COLUMBIA

  14. Distribution UNIVERSITY OF BRITISH COLUMBIA

  15. Competitors UNIVERSITY OF BRITISH COLUMBIA

  16. Competitive Advantage • NAFTA, taxes and tariffs • Marginal tariff for French Producers • Excise tax • $8.70/bottle in Canada • $6.43/bottle in France • Shipping rates • France rate = 5.5 x Canada rate • $2.05/bottle from Canada • $11.40/bottle from France

  17. Shipping Times UNIVERSITY OF BRITISH COLUMBIA

  18. Competitive Advantage • Factor abundance • Canada relatively more abundant in agricultural labour and cropland • France more abundant in manufacturing labour • Revealed competitive advantage (RCA) in export of spirits • Canada: 61.7 • France: 403.5

  19. Foreign Exchange – Canadian Dollar Valued in US Dollars UNIVERSITY OF BRITISH COLUMBIA

  20. Foreign Exchange – US Dollar Valued in Euros UNIVERSITY OF BRITISH COLUMBIA

  21. Foreign Exchange Projections – CIBC/Scotiabank UNIVERSITY OF BRITISH COLUMBIA

  22. Regulations for Importing Alcohol into the US • Both federal and state permits required from the Alcohol and Tobacco Tax and Trade Bureau (TTB) • A staff and office must be established in the US • Must receive approval for labelling and appearance of product according to the Federal Alcohol Administration Act • Overall a complicated process – can be simplified by partnering with an existing licensed importer UNIVERSITY OF BRITISH COLUMBIA

  23. Constraints to the Business • Regulatory environment • Taxes, policies, border problems • Consumers taste and perception of Canadian liqueurs • Macro-economic climate • Growth, exchange rates • Possibility of new and local competition

  24. QUESTIONS? UNIVERSITY OF BRITISH COLUMBIA

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