gluggy
By Rick Watkins, CSW
Bulk vs.
Boutique
where are your dollars going?
Do you ever wonder why some wines cost $ 10 and some cost $ 500? When I am working in the Banville & Jones Fine Wines Cave, customers will often come in to check out our range of high-end wines. When they get to the Spain section, they usually gasp when they see that a wine from Pingus Winery is $ 1,299 a bottle. Following their initial stunned silence, they ask:“ Why does it cost that much?” There are several reasons for the discrepancy between the prices of Two Buck Chuck, the United States wine market’ s reigning deal at $ 2.99, and a 1969 Domaine de la Romanée- Conti Richebourg Grand Cru that recently sold at auction for over $ 9,000.
Although high quality is arguably the most important factor affecting a wine’ s price, a wine must be of high quality every vintage to build consumer confidence. This is why some top wine properties will only release their top cuvées in exceptional vintages. This practice adds to the cost and scarcity of the wine. The law of supply-and-demand also comes into play. For example, Domaine de la Romanée-Conti produces only 1,000 cases of its Richebourg Grand Cru and there are thousands of people who want a bottle, whatever the price.
The region where the wine is produced is also important. If a region has been producing amazing wine for a long period of time, they can charge more for their product than a new, emerging wine region that has yet to set its standards. Bordeaux, Burgundy, Champagne, Tuscany, Napa Valley, and Rioja are wine regions where a high standard of quality has been maintained for a long time. Based on those established reputations, they can place high prices on their wines.
The score that a wine receives can cause the price to jump exponentially as well. If Wine Spectator magazine or Robert Parker give a wine 100 points( a perfect score), wine buyers will clamour to purchase it at any price just to be able to taste perfection in a bottle.
Ultimately, the details of the production process contribute most significantly to a wine’ s final price tag. How a $ 500 bottle of boutique wine is made differs a great deal from how a $ 10.00 bottle of bulk wine is made. The following chart shows the differences in how the two wines go from berries to bottle.
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