Why are some wines so expensive?
I get asked that question at least once a week. Well, recently I took some of my crew to Las Vegas for a big time wine event sponsored by the Wine Spectator. We were part of the wine trade, so we entered before the general public. What we witnessed next was almost unbelievable. Like the running of the bulls or at the gates of a rock concert. Elegantly dressed guests, who paid $225.00 per ticket, were running, yes running, to taste one of the most expensive wines at the event. They were chasing the 2004 Chateau Margaux, a famous red Bordeaux from France. I checked online and it goes for over $400.00 per bottle. Eventually, a long line snaked its way through the Mirage Hotel ballroom. The line got so long and formed so fast, other attendees were snapping photos of it.
Was it that good? Everyone in my crew thought it was good, but fell somewhere in the middle in terms of quality vs. the other 200 wines at the event. We felt there were dozens of lesser known, and significantly less expensive wines that were better at 1/10th the price. Let’s not forget that taste and flavor are all subjective.
I will admit that wine production costs can vary widely. Some of the factors are land prices, oak barrels, vineyard yields, labor (hand picked or machine), and marketing costs just to name a few. But as a highly regarded old time winemaker once confessed to me that “you can’t spend more than $25/bottle making a great wine….the rest is bull.” Whether that old curmudgeon was right or wrong, how much can it possibly cost to get a bottle of fermented grapes to your table?
That said, I believe the real reason wine can be so expensive is because they can get away with it. Consumers have in the past and in the future will pay the price. I believe there are four main reasons:
- The brand and its history – There’s only one Chateau Margaux in the world and they’ve been at it for hundreds of years.
- Scarcity – depending on the vintage, 20,000 cases are made, sounds like a lot but really its not.
- Globalization – It used to be that high end wine had a fairly small audience, ie. wealthy Europeans and Americans. Now, well to do wine enthusiasts cover the globe and snap up whatever they can get.
4. Luxury – just like any other status driven brand, whether its couture, Christian Louboutin shoes, or Tiffany jewelry, it’s not just the quality of the product but how it makes you feel when you are wearing or consuming it.