Why Do The Prices of Wine Bottles Vary So Much From One Bottle to Another?

When we find ourselves in front of a wine shelf, the choice can be complicated, especially if we are not experts. Some are attracted by elegant labels, others consider the price as an indicator of quality: the higher the price, the more valuable the wine. This reasoning, although it has a basis, does not always reflect the whole reality. There are excellent wines at modest prices and there are real rubbish at exorbitant price. The price of a bottle is almost always linked to raw materials and production process but varies based on multiple factors, some of which do not directly concern quality. These changes are especially at the extremes of the market, as reported by the Post, that is, the most expensive wines and those that cost very little.

What Affects The Price of Wine?

The price of wine can depend on a series of variables. At the two extremes of the market we find cheap wines, often sold for a few dollars, and luxury wines, which can reach astronomical figures. Some rare and fine wines, in fact, can be sold at auction for tens of thousands of dollars, but this does not mean that their quality is proportionally superior to cheaper ones. According to expert sommelier Andrea Gori, the price of a wine depends approximately 50% on the real quality and 50% on intangible factors, such as the prestige of the brand or the reputation of the producer. Beyond a certain threshold, quality ceases to be the main element that determines the price: it is the prestige, the rarity and even the vintage that make the value of a bottle rise.

For example, a collectible wine is not bought because it is good, often it is undrinkable, but it is bought for the rarity of the bottle. The Post takes as an example the case of five magnums of Romanée-Conti from 1999, sold at auction by Sotheby's for 275,000 dollars. The price of 55,000 dollars per bottle does not reflect the taste of the wine, but rather the vintage, the rarity and the prestige associated with the producer. In practice it works like any other luxury good, such as a watch or a car. The difference between wine and other products, however, lies in a very interesting factor: if we buy a Ferrari, we know every feature of the vehicle, we have no surprises; with wine, on the other hand, we know little at the moment of purchase because the bottle is sealed.

It's all about reputation, after all. We can frame the concept of reputation in the world of wine in one sentence: how much is the end customer willing to risk? Consumers tend to want to pay less for a bottle they don't know because it's a gamble for them. For this reason, many producers try to invest in advertising (which is not just the classic one on TV or in newspapers) to build a reputation and narrow the gap between the known and the unknown. The more uncertainty is reduced, the higher the price can be.

Most consumers buy wine for drinking, not for storage, and in this case the price more directly reflects the costs of production. Factors that influence the cost of a wine include the quality of the grapes, the winemaking techniques and, in some cases, the difficult growing conditions. For example, Conegliano Valdobbiadene Prosecco Superiore DOCG, produced in a hilly area of ​​Veneto, has higher production costs than a Prosecco produced in the plains.

However, the concept of "quality" in wine is complex and also depends on personal taste. Lamberto Frescobaldi, president of Unione Italiana Vini, points out to the Post that it would be more correct to speak of "satisfaction" rather than "quality", since the tasting experience varies greatly from person to person. However, there are some objective parameters that can give an indication of the quality of the wine and, consequently, influence its price. Among these are the vintage and the aging process, two characteristics appreciated above all by experts. Belonging to a controlled or guaranteed designation of origin (PDO and PGI) can also play an important role. A wine like Chianti Classico, for example, offers a certain guarantee of quality thanks to the strict production rules imposed by the denomination. Having said that, we repeat it again this time: PDO, PGI or any other food and wine label protect the consumer from fraud but are not synonymous with quality.

The influence on the price is also given by intangible factors and here we come into play with the advertising we talked about before: guides and critics can significantly change the price of wines. An example is Robert Parker, a world-famous American critic, who with his 100-point scoring system contributed to the rise in the price of many bottles. According to some estimates, a wine that received the maximum number of votes could quadruple its value. This is because the judgements of the guide were published in spring, before the producers set the prices of the bottles. The greatest fluctuation in prices was seen (now less) on Bordeaux en primeur wines, that is, those sold even before the end of the aging process and delivered only years after purchase: fluctuations of several hundred dollars thanks to the judgement of a critic.

Wine, especially collectible wine, can be an investment. Andrea Gori explains to the Post that, compared to other luxury goods, wine offers a more accessible way to acquire social status: while a luxury watch can cost tens of thousands of dollars, a thousand-dollars bottle of wine can already make a "good impression". Furthermore, many collectors buy wines with the intention of drinking them on special occasions, such as birthdays or graduations. Limited editions and auctions further contribute to increasing the value of certain bottles. A recent example is a "primat" bottle of Colore 2016, a Tuscan wine produced by Bibi Graetz, sold for over 100,000 euros. In this case, in addition to the quality of the wine, the high price is also due to the special format of the bottle and the personalized packaging. In recent years, real "new jobs" have been created: people invest in wine as they do with the stock market precisely because the prices of bottles can soar so much.