Chapter 20: Chapter 20 The Star Empire Situation
The Free Federation was a country unlike the Star Empire, which was in the midst of reform. In the rectly concluded war, the Star Empire had won a bitter victory, while the Free Federation had achieved a major victory.
This might seem confusing to many how could both countries claim victory in a war betwe them? The answer was not that complicated. For the Star Empire, victory meant defding their territory, suring that the invaders didn't seize their land or slave their people, which was how they defined their victory in the war.
However, for the Free Federation, although they hadn't gained land or cheap labor, they had achieved an unprecedted economic breakthrough, particularly in tariffs and other matters still undocumted in the unofficial post war memorandum betwe the two nations.
This bitter victory for the Star Empire led to widespread reflection across the empire. Once a mighty power, how had they be reduced to the point where they were bullied by a federation without ev a king or a pope? In the midst of this political turmoil, the empire's various factions gradually coalesced a one idea:
The emperor's interferce during the war and the rampant class struggle had severely damaged what could have be a favorable situation. After the war, a new notion quickly took hold: the imperial system was outdated, and only a constitutional monarchy could save the Star Empire from the brink of collapse.
The nobles, who had lost their imperial protection, the new reformers aspiring to become the country's ruling class, the capitalists eager to influce politics, and the idealistic rebels seeking to change the world…
These clearly defined groups were now performing a series of shocking political dramas on the brightest stage of the Star Empire.
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In such a situation, societal issues were naturally pushed aside by the powerful.
For the capitalists of the Free Federation, the empire now stripped of some of its tariff powers had become a ripe opportunity. Goods of all kinds flowed across the border into the empire. With tax exemptions and ev refunds and subsidies, the Star Empire's light and craft industries faced immse pressure, turning the empire into a playg for Federation merchants.
Julian's upcoming meeting was with one such merchant from the Federation.
"You look very young. Forgive me for asking, but are you of legal age?" The blonde, forty something agt with a bushy brown beard looked like his eyes were about to pop out of his head. Julian indeed looked very young. The agt didn't mind doing business with people of differt ages or backgs, but he was clearly surprised.
Julian shrugged, casually lit a cigarette to make himself look a bit more mature, though it might have had the opposite effect. Flicking the ash with practiced ease, he replied, "I'm already sevte, Mr. Richard."
Richard gave a noncommittal nod, a hint of nostalgia in his voice as he said, "Wh I was sevte, I was still working in a factory for a boss. But you, at sevte, already own your own trading company..." He shook his head with a smile. "Alright, let's get down to business. I hear you want to purchase some low alcohol wine for resale, is that right?"
Before Julian could answer, Richard continued, "Moonshine has a unique taste, differt from the common low alcohol wines on the market. Our wine has a slightly bitter almond flavor, not overly sweet like those juice like wines that can be cloying. With our Moonshine almond wine, you can easily drink five or six bottles."
"More importantly, our price positioning is spot on. We target the mid market, so it's affordable for everyone, while still leaving you ough room for profit."
Julian nodded. He already knew all of this. What concerned him was the price. "Can we discuss the specific price, Mr. Richard? Our target is not just the city of Ternell, but the tire province, and perhaps ev the whole empire."
After thinking for a momt, Richard quoted a price of 85 cts per bottle. As he had mtioned earlier, this price was in the middle of the low alcohol wine market. Cheaper wines could go for 55 or 60 cts a bottle, while more expsive ones could cost over a dollar. The 85 ct price was certainly well positioned, but it wasn't a price Julian could accept.
Whether it was selling the wine directly or using it for distillation, the price was too high and awkward. To sure a profit, Julian would have to sell the wine at a dollar per bottle. Wh the bars put it on their shelves, they'd need to sure at least a 30 ct profit per bottle to make it worthwhile.
Wh the wine reached the customers glasses, the price per glass would be a 30 cts.
A mid range price like this created an awkward situation, which might explain why Moonshine hadn't gained much traction in the empire so far. If customers wanted to drink something cheaper, they could get two glasses for the price of one. Heavy drinkers didn't care about the quality of the wine they just wanted to get the most for their money. As for middle class customers?
They'd rather spd an extra or 0 cts to drink something of higher quality.
Someone who could afford to drink a 30 ct glass of wine wouldn't mind paying an extra cts. What they cared about was prestige.
This awkward price point made Moonshine an unpopular choice in bars, with sluggish sales.
For distillation, it was ev less cost effective. It would take three bottles of Moonshine to distill one bottle of high proof alcohol, bringing the cost to about .50. Adding in the cost of fruit juice, labor, various losses, and the occasional bottle breakage during transport, the total cost would rise to a five or six dollars.
Selling it to bars would yield only about a four dollar profit, with over a dollar of that going to Graf, leaving Julian with just over two dollars.
Risking jail time for a business with only a 40% profit margin? That would be crazy!