Monday, January 10, 2005

Wine Price Versus Wine Value

What has always intrigued me is the price a bottle of the fermented juice of a grape will fetch. Recently, a bottle of Chateau D’ Yquem sold at auction for somewhere around $70,000. While that is certainly on the unique and ridiculous end of the wine pricing spectrum, it is not uncommon for a bottle of wine today to sell for several hundreds of dollars. Some of your Bordeaux’s Grand Cru En Classe and top line Burgundies will regularly sell in this range. So while I am not sure I would be willing to pay hundreds of dollars for a bottle of wine even if I could truly afford it, you have to wonder, just how reflective of quality is the price a wine sells for.

The easy answer is, for the most part, it’s NOT! (Remember this is my opinion)

Back in the 70's when I began what would become a lifelong study, I noted in some of my early notes that when it came to wine, more than anything else, you really did get what you paid for. A $4 bottle of a Riesling (a specific type of grape) was pretty much the same quality as any other $4 bottle from any other vintner. And a $12 bottle of Merlot (a specific type of grape) was considerably better than a $5 bottle. But somewhere along the line that all changed.

Part of it was the maturity of the California wine industry from an infant learning to walk to the world wine powerhouse that it is today. Face it, when you’re shy and unassuming, with acne that won’t quit, you’re not about to walk over to the best looking blonde at the dance and ask her to the floor. You feel lucky if the bespectacled, frump with the metal clad smile is willing to have a spin with you. That was California wine early on. But then California came into its own and Napa and Sonoma started producing bottles of wine that would rival some of France’s best although without the hype and fanfare of centuries of history and tradition to back up their marketing. California was the new studly jock at the senior prom.

I remember reading about a guy named Joe Heitz who was making a bottle of Cabernet Sauvignon from grapes grown on a small parcel of land called Martha’s Vineyard. This wine was selling, if you could find it, in the $100 range and he was having no problem getting rid of it at that price. I fantasized what such a wine would taste like and whether it would really taste ten times as good as a $10 bottle. I would never know...

But there was a definite change in the world wine market. Over the past two decades the economy grew to something called a global economy and suddenly countries that had been making wine for decades began shipping their product to markets all over the world. (Supply and demand, and good old competition will set your pricing every time whether you’re talking wine, whiskey or widgets.)

So today, we have countries like Argentina and Chile and South Africa and Australia making superior quality wines in such quantity that they have to keep the price down to get rid of their abundance. Where some of the California and French wine makers were and are producing 3-5,000 cases (and much less in some situations) of a particular wine in any given year, Chile, for example is producing 50-100,000 cases. With Argentina, Australia and more and more countries annually getting into the global wine market, there would either be a lot of wine left on shelves, or the prices would have to come down. And come down they have and the quality has sky rocketed. All of this is nothing but a gold mine for savvy wine lovers.

Sure there are still plenty of very mediocre wines galore, but there are also plenty of really top notch bottles sitting on shelves for under $20 and when you get up into the $50 range, you have to look at Casa LaPostolle Cols Apalta, and Don Melchor produced by Concha Y Toro, both Chilean wines rivaling some of the best of the best.

This is where a magazine such as the Wine Spectator is so valuable or Robert Parker’s Wine Advocate. Wines of all pricing are tasted blind, so as not to be swayed by a label and reputation, and are in essence rated against each other, and against a somewhat objective standard for fine wine.

And it is eye opening to see a “second growth” Bordeaux selling for $250 scoring a 90 and a bottle of Joseph Phelps “Le Mistral” which sells for $25 scoring a 91. So how would you rather spend your money? 1 bottle of Bordeaux with an impressive name or ten bottles of an equally good Phelps for the same price?

I always look for value in my wines. Meaning I am getting a good quality wine for a price that is far less than many other wines of the same quality. There are too many to list but here again The Wine Spectator gives you a list in each issue along with the snazzy and expensive and hard to come by.

So when it comes to wine, you definitely do NOT necessarily get what you pay for today which can be a very good thing because often times, you get much, much more.



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