What Makes Some Wine So Expensive
2009 CHATEAU MARGAUX BALTHAZAR – $195,000
The price of a bottle of wine reflects a few things. First, there are the costs of production. They have to figure out how much it costs to make a bottle. Then there are the raw materials of grapes, barrels and bottles, plus utilities and labor involved with all those steps. You also then have to factor in administrative, sales and marketing costs. If the wine isn’t sold directly to a consumer, then distributors, wholesalers and retailers all look to make a profit on every bottle sold, so there are price increases from every hand it goes through. If you’re in a restaurant and order a bottle of wine, those are often the biggest markups. Lastly, there is the variable of wine being a product of agriculture, this means some vintages can vary dramatically in their yields, affecting the whole supply/demand factor, and some challenging vintages bring higher labor costs.
CHATEAU MOUTON-ROTHSCHILD 1945 – $114,614
CHATEAU D’YQUEM 1811 – $117,000
Expensive wines are usually expensive for two reasons. First off, expensive wines typically cost more to make. The raw materials can vary quite a bit in cost—a high-yielding grape from an unknown vineyard fermented in a stainless steel tank won’t cost as much to make as a wine made from a low-yielding, marquee vineyard, fermented in brand-new oak barrels by a highly sought-after winemaking consultant. A tough growing year for grapes, a difficult harvest season can all add to the final price tag of wine. Secondly, expensive wines are expensive because they can be. Perceived value is how a customer sees the benefits and value of a product. This is particularly true when it comes to things that fall into the luxury category. When talking about perceived value, from a marketing perspective, the wine industry has set the standard.
DOMAINE DE LA ROMANEE-CONTI 1990 – $20,975
Of course, value is subjective. You might get a lot of enjoyment from an expensive wine, or you might find that any bottle under $10 dollars does the trick. Wine is a product that can be enjoyed in a number of ways, the idea is to buy what makes you happy, and only invest in wine when you understand the ins and outs of the industry. A high price tag does not necessarily mean it holds great value now or that it will appreciate in value.
SCREAMING EAGLE CABERNET SAUVIGNON 1992 – $500,000