Ummmm, has anybody bothered to do the math?
Below are some average online prices for Trump and Olifant:
Trump Vodka: 26.95. Case: 161.70. Size: 750ml. Bottles per case: 6
Olifant Vodka Price: 12.49. Case: 149.88. Size: 750ml. Bottles per case: 12
The ONLY reason I put these up is to confirm how many bottles to a case. Online prices have no bearing on the Israel deal whatsoever except to also prove Drinks' cost is roughly half of what the products sell for online.
I can tell you this for a fact. It costs Drinks no less than $14 a bottle to make Trump and $6.50 a bottle to make Olifant.
Here is the guts of the Israel Contract:
11. In the past two months you have announced $120 million in distribution deals just from two distributors in Israel and Germany. As CEO and the largest holder of Drinks stock, can you comment how at the beginning of the largest growth phase in Company history is resulting in the stock sitting on all time lows?
I think our stock is considerably undervalued. In the long term, I believe we will prevail with that viewpoint. Perhaps our story is misunderstood by the market. I draw reference particularly to the Israel Agreement as a case in point. This is not a distribution contract but rather a contract obligating our partner to purchase a minimum of 72,000 cases of Trump, 12,000 cases of Olifant, and 2400 cases of other Drinks' brands on an annual basis.
Trump Case Cost(6): $84
Olifant Case Cost(12): $78
Trump: 72000 X $84 = $6,048,000
Olifant: 12000 X $78 = $936,000
Total Trump and Olifant at Drinks' Cost/no mark up: $6,964,000
Plus: 2400 cases Other: OWR, Sparkling Vodka, Aguila
Read the Shareholder Letter again. The deal has NOT changed.
I can understand some volume buying incentives and some discounting due to the magnitude of the deal, but let's face it, it is NOT 50% of cost w/ no mark up!
