US wine and spirits pricing terms

The vocabulary used to price wine and spirits into the United States, defined the way the trade uses it.

Cost and price

FOB

Freight on Board. The producer's price at the point goods are loaded for export, before freight, duty and US taxes.

Ex Works (EXW)

The price at the winery gate. Buyer takes all cost and risk from pickup.

Landed cost

What the importer pays to get goods into their warehouse. Freight, duty and inbound charges included.

Laid-in cost

What the distributor is charged to receive goods from the importer. Includes transfer, warehousing and state taxes. Full guide to laid-in cost.

Freight

Ocean and inland transport. Varies by destination state.

Shelf price (MSRP)

Manufacturer Suggested Retail Price. The consumer price a program is built to hit.

Margin

Profit expressed as a percentage of the selling price.

Blended margin

Weighted margin across a portfolio, all states and channels combined.

Tax and duty

ABV

Alcohol by Volume. Sets tax class. Thresholds vary by state.

FET

Federal Excise Tax. Levied by TTB on alcohol entering US commerce.

State excise tax

Levied per state on top of FET. Rates vary by category and ABV.

Wine gallon and proof gallon

Wine excise is per wine gallon. Spirits excise is per proof gallon, adjusted for alcohol content.

Tariff and duty

Import charges by origin and product. Some trade agreements zero them out.

Structure

Three-tier system

Producer, importer, distributor. Each tier separately licensed.

Control, open and franchise states

Control states act as wholesaler or retailer and often set price. Open states use private wholesalers. Franchise states restrict changing distributor.

Deals and allowances

Depletion

Product sold from distributor to retailer or on-premise account.

Depletion allowance (DA)

Per-case allowance paid against depletions to support price.

SPA

Special Purchase Allowance. Time-limited allowance to drive purchasing.

Billback

Allowance claimed after the sale rather than deducted at invoice.

Channel and management

On-premise

Restaurants, bars and hotels. Consumed on site.

Off-premise

Retail. Independents and chains such as Costco, Walmart and Target.

Incentive program

Payments motivating distributor teams or sales reps on a brand.

Definitions reflect general US trade usage. Rates, thresholds and permitted deal structures vary by state and change over time. This is not legal, tax or regulatory advice. Reviewed August 2026.