Yulia Dorofeeva, Martina Valkovicova, Levi Wood

Agenda

           The Company Product Shipping Import procedure Tariffs and taxes Volumes and distribution Customers Competitors Marketing and promotion Summary and conclusions Questions

The Company

     history dates back to 1867 distilling company producer of wide range of popular spirits spirits ranked among the best on Slovak market traditional recipes

Product

    Zbojnícka slivovica - 52 % distilled spirit traditional method made of juicy plums and crystal-clear Tatra water

Shipping

Shipped as a pre-packaged and sealed product Standard shipping box 12 bottles per box 60 boxes per pallet Based on Movement by NVOCC from Slovakia to Canada Total Cost – approx $ 1010 USD

Import Procedure

1. Obtain Import Permit 2. Pass Inspection from CFIA and CBSA 3. Determine Appropriate Tariffs 4. Ship Product 5. Further Inspection 6. Distribution/sale

Tariffs and Taxes

HS Code : 220890.92 Fruit Brandy - Beverages, Spirits, and Vinegar Covered by the Canada – European Union Trade Agreement - Wine and Spirits Agreement (2003) - Potential Free Trade Agreements in the Future MFN status applies as does Consolidated Tariff policy Federal Tariff – 24.5 c/ Litre spirit alcohol Excise Tax – $11.69/ L pure alcohol GST – 5%

Tariffs regulations

Based on a Single 700 ml Bottle Euro Original Cost Shipping Warehousing Fee Insurance Canadian Tariff Duties Gst @5% Federal Excise Tax 8.19

0.99

0.14

0.25

0.12

0.41

2.21

Total Cost BCLS Markup Cost + Markup inc pst Profit Total Selling Price Profit Margin 12.31

9.93

22.24

4.06

26.31

32.99% 1.47667

1.47667

1.47667

1.47667

1.47667

1.47667

CAD 12.09

1.47

0.21

0.37

0.17

0.61

3.27

1.47667

1.47667

1.47667

18.18

14.66

32.85

6.00

38.85

Exchange Rate Risk

Customers

 According to the statistics, there are about 2, 5 mln of people at the age of 20-65 in BC.

 About 50% of them consume alcohol spirits  People of Eastern European Origins - 219 325

Consumption

 Increase from 8.18 litres per capita in 2002 to 8.53 litres in 2005 and 9.2 litres in 2009.

Domestic spirits Import spirits

Dollars

15 867 000 9 877 000

Litres

426 101 314 827

Competitors

 Three levels of competition: world-known brands of spirits (whiskey, vodka) national drinks (rakia, schnapps etc) different types of spirits from plums

Volumes and distribution

 Distribution places: BC liquor stores Bars, clubs, restaurants

Marketing

  Marketing research Promotion tools: Sample testing Point of purchase advertising/samples Social media (meetup.com) promotion

Summary & conclusions

 Great opportunity!