Transporting wine in bulk in plastic bags from Australia to the UK

An article in Bloombergbusinessweek (February 7,2013) describes shipments of Australian wine in 24,000 liter plastic bags that are then packed in the UK. Saving 25 cents per bottle by shipping without the bottle enables the wine to be sold for $5 a bottle despite appreciation of the Australian dollar. Given the transport cost savings for shipment by sea in plastic bags, and the ability to compensate for currency shifts, does this suggest that packaging choice can considered to be a real option? If the price of this savings is a loss of product quality, how should the margin maintenance be traded off against its demand impact ? The article suggests that this shipment mode may only apply for low price products, but are there contexts in which sustainability benefits may justify using such approaches for higher margin products ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues and tagged , , , , , , . Bookmark the permalink.

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