“Why so much?”
This is a question I get asked often during my Wine 101 course. What is so swell about this 2010 Antinori that warrants its $100+ price tag? Simple question, with a kind of simple answer, because it can! Just kidding! Sort of. There are actually some that do charge exorbitant prices due to name recognition, there is still a bit more going on behind the scenes to warrant the hefty price tags. At the end of the day if no one is buying your wine, you ‘just can’t’ charge that much. Here are a few factors to consider in regards to the price of wine.
- Name – just like Gucci, Prada and Chanel have established a name for themselves as luxury goods, so have wines such as Chambertin, Cristal, and Lafite have been lauded as luxury wines. When you have a name for yourself, people will pay.
- Storage/Aging – When a wine is held to mature at the winery, the winery isn’t making any money on that wine. For example, Champagne by AOC law has to be aged a minimum of 15 months on the lees. The time they can’t sell the wine is tacked on to the end price. The end customer is paying for the wait. You’re looking at a bottle of wine from the 90’s, you’ll be paying a bit more than the same wine from 2011.
- Bottle – A box is going to be cheaper than glass. Then there is heavy glass and hand blown glass and… you get the picture. Oh, and screwcaps cost significantly less than corks.
- Transportation – Getting wine to the states from Australia, France, Italy, etc is costly. From cargo ship to truck, those costs are then passed down to the customer.
- Exchange rate – If you’re ever traveled out of the country, you know the dollar isn’t doing so well compared to some countries. And you’ve probably been disappointed when you hand over $100 and only receive €73. Take the extra costs above, add it on, then calculate the exchange rate.
- 3 tier system – This is the kicker here. So, the wine has been aged, bottled, and shipped to the States. But to be shipped here, it must go through the 3 tier system: importer, distributor, retailer. The importer can only sell to distributors, who can only sell to retailers, who can then sell to customers. Everyone has their hand out in the 3-tier system. And you already know where we’re going with this, that costs gets passed down to you, the customer.
So when all is said and done, that bottle that is €5 in France, quickly becomes $30-$45 in the US.
How much have you spent on a bottle of wine? Have you ever had a $100+ bottle of wine, did it measure up to your expectations? Let us know in the comments!