Page 15 - CL Industry Analysis
P. 15
Economies of Scope
The emphasis is on better utilisation of overhead and
common assets
Chase Distillery produces its own organic potatoes from its
own farms for production of its vodka and gin.
It also produces its own raw materials, wine from its French
vineyard and snacks from its farm produce all of which
utilise its management, packaging, branding and
distribution.
As these costs are spread over a variety of products, their
average cost per unit of production declines.
