£16,000 for ONE bottle of wine?!
Today we're talking about why some wines are so expensive. This is another of those questions I get asked a lot. But how expensive are we talking? For example, a quick look at Wine Searcher reveals that the average per-bottle price of Château Le Pin, a famous estate in Bordeaux, is in excess of £2,500. It gets even crazier for Domaine de la Romanée-Conti in Burgundy; average price of more than - wait for it - £16,000 per bottle!!
But why, you may ask? Can a wine ever be 'worth' such an amount of money? Do you get 1,600 times more pleasure than if you spend a tenner on a bottle of wine?!
The short answer is, of course, no. A learned Master of Wine colleague of mine said once that 'a wine is worth what somebody is prepared to pay for it', and indeed that is true of anything that trades hands for money.
If we look at wine pricing from the perspective of production costs followed by margins added on top for the producer and the seller, then of course the cost of production of a particular wine will affect the final price. Factors that influence production cost include the yield of grapes (more grapes = more wine but not necessarily higher quality, so some producers restrict yields for quality purposes and thus increase their costs), the labour required in the vineyard (some of the world's finest wines come from vertiginous slopes like in Portugal's Douro Valley - pictured below with me posing in front of them! - but these vineyards must be worked entirely by hand and thus add significantly to the cost per bottle), and the expense of the equipment used in the winery, to name but a few.
Breathtaking, steep vineyard slopes in the Douro Valley...and a visitor!
Of course, even in the finest vineyard in the world, whose workers take meticulous care over every individual vine and whose winemaker invests in the finest of oak barrels, there will be a ceiling in terms of what it can cost to produce a bottle of their wine. For understandable reasons, producers are reluctant to admit to their exact production costs - but let's say for the sake of argument the most expensive bottle in the world costs £50-£75 to produce. Why on earth, then, would it be selling for £16,000?
The simple answer, and once again this applies to anything which trades hands for money, is supply and demand. If your demand is greater than your supply, your selling price goes up. In the world of wine, there are many things which influence demand. Take respected critics, for example - Robert Parker Jr is retired now, but in his heyday he could make the price of a wine soar overnight by awarding it a score in the high 90s.
Look also at reputation and history - when you buy a wine you're not just buying the experience of drinking the liquid, you're also buying into the story of that prestigious estate. And let's not forget also that many wines, particularly the top ones from Bordeaux and Burgundy, are these days traded like commodities on the secondary market, which can also cause their prices to skyrocket. Certain years (or 'vintages') will also always be particularly in demand, and even more so as they age.
For most of us, Domaine de la Romanée-Conti is not going to be our everyday drinking tipple (to put it mildly). So in a future update I'll be sharing with you what I personally believe the sweet spot is for wine pricing, and what I myself like to spend on wine.
Happy (everyday-priced!) wine-drinking in the meantime!