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FRIDAY GETAWAY DAY
04/27/2012
Friday Fishwrap
Save Your Money—No Wine Is Worth More Than $25

By Stephen Eliot

There supposedly knowledgeable folks who make that argument. I respectively disagree.

I have been in the business of wine for a very long time, and, in every venue in which I have worked from journalism to retail from restaurants to education, the issue of value has been a constant concern. What is a fair price for a bottle of wine? Just what is a wine worth? What ultimately determines the price of this or that bottle?

Jeff Miller’s recent thoughts shared on the Artisan Family of Wines website * reminded me that those questions, while as germane as ever, are simply impossible to answer.

Now, there are those such as Fred Franzia who proclaim that no wine is worth more than ten dollars a bottle, and barking bloggers abound who damn costly wines as creation of elitist critics. There are also plenty of folks who discover upon tasting a glass of Two-Buck Chuck from Trader Joe’s that just maybe you get what you pay for. Some would argue, as did Steve Heimoff in his eponymous blog last week **, that maybe you don’t always get what you pay for.

OK. Agreed. But you generally don’t get what you don’t pay for, at least when it comes to Cabernet and Pinot Noir. And, behind every musing is the notion of what is fair and what is not.

I am not so sure that “fair” is really germane to the discussion. We live in a free market, and, very arguably, it is the consumer that decides what is or is not a fair price. There are no fixed cost-versus-profit formulas of which I am aware that come with moral force.

I would not tell someone who derives enjoyment from a glass of Charles Shaw Merlot that they are wrong, and, I suppose I wish that my pursuit of vinous pleasure could be so cheaply satisfied. I would, however, find no agreement when that same individual called me an idiot for thinking that Joseph Phelps Insignia is a remarkable wine that just might be worth the price. I believe that there are a good many wineries that undervalue their wines just as there are many that seem intent on picking my pocket, but the market is the ultimate arbiter of real worth. Discovering a great value has always been as exciting for me as tasting the world’s finest wines, but that the latter may come with prohibitive prices in no way lessens my appreciation for what they are.

Yes, there are many costs of production, marketing and capital expense that must figure into any winemaker’s calculations in running a profitable business. There are, however, no guarantees nor should there be that a wine should sell for a particular price based on the cost to produce it. Some people make good business decisions and others do not, and the consumer is not there to pay for their mistakes.

On the other hand, fine wine, at least, has been justly called “art”, and with most any art, perception and appreciation have little to do with capital cost. Hmmm, just how much did the oil and canvas of Picasso’s Guernica really cost?

Within the realm of laissez faire economics, something is worth whatever the consumer is willing to pay for it, and informed consumers are not so easily deceived. I, for one, happen to believe that there are a lot of well-informed wine consumers out there, and that if beauty lies in the eye of the beholder so does relative worth. Maybe the market will decide that no Napa Cabernet or Côte d’Or Burgundy should cost more than $25.00, but I am not holding my breath.

* http://artisanfamilyofwines.com/blog/?p=1998
** http://www.steveheimoff.com/index.php/2012/04/16/with-cabernet-and-pinot-you-get-what-you-pay-for/


 

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Comments

No Subject
by Samantha Dugan
Posted on:4/27/2012 10:50:25 AM

Still on a cloud after a wine dinner we did last night that featured the wines of Domaine de Montille I'm going to have to agree with you on this one.

pricing
by John
Posted on:4/27/2012 1:05:36 PM

I just have to laugh at the thought of a consumer telling me what my wine should cost. A bit self-serving on their part, maybe? "But Joe Winemaker told me that it only costs $25 to produce a wine!" OK, Einstein - a) JW told you something, but he did not tell you waht it costs to run a business and b) if you are so business-sharp why don't you buy some land in Napa or Sonoma, plant it, build or lease a winery space, equip it, hire some employees, and start paying for professional serevices, and taxes. Oh, and pay interest/principal on any money you had to borrow to make this happen, and then show me how you stay in business charging $25/bottle retail.

Otherwise, how about you just buy the wines that fit your pocketbook and stop telling me how I should price my product. Especially, stop accusing me of some sort of exclusionary elitism or ego when I charge $50 for some pretty damn good Pinot. If you don't think it's worth it, don't buy it - and stop your whining.

No Subject
by Steve
Posted on:4/27/2012 5:39:24 PM

The market will dictate prices.  If the market will not pay what a winery needs to charge to remain profitable, the winery will go out of business.   The larger the winery, the smaller the margin they can have and remain profitable.  The smaller the winery, the greater the need for margin. 

All retail is based on an established set of expectations from the consumer...the higher the bottle price, the greater the expectation from the customer.   Only that customer knows whether the wine they just bought at whatever price meets or exceeds (or failed to meet) their expectations.

No Subject
by gdfo
Posted on:4/30/2012 9:30:40 AM

It is no longer true that a fine/expensive wine is a rarity.  Price is and should be reflective of rarity, quality, and demand.  It is however not always true either. 

Just look at other markets.  When a producer finds that at a certain point in time, his/her product has become desirable due to a rise in popularity of that TYPE of product the demand will go up, but the quality does not always stay the same and infact does someitmes go down. 

Not all retail is based on a set of expectations from the consumer.  Just look at what GM did with autos in the past.  The rise and fall of the popularity of a specific product will infuence its price but the producer will decide if they want to continue  if they cannot make the profit that tjhey want or expect. 

Price Dictator Forever!
by Rich
Posted on:4/30/2012 10:24:48 AM

- No wine should cost more than $25!

- No wine should have more alcohol than 13.5%!

- Winemakers who make more should have to give it all to charity!

- Wines with less than 14% alcohol are "wimpy" (oops, is that a contradiction)...

- Wine people are snobs and they charge a lot to maintain their snobby wine life...

Mr. Eliot - these are many of the comments I've heard - I make a small amount of wine - not much - and it's mostly made by my own two little hands - I do it for myself and an extremely small customer base who likes it - if I charge $25 a bottle, I will have to stop making it...

and also have to say, I have tasted some insipid wines that are $50 and more; delicious wines that are $15; but, in general, many, many, very good wines I've tasted (though I probably don't taste as many as you, Mr. Eliot) are far more than your $25 price point.  Many are from small producers who have to charge more to recoup costs, not because they are gouging you...

Now, having said that, I couldn't tell if your tongue was firmly planted in cheek or not...  After all, Mr. Franzia did make his now famous comment...  and it wasn't tongue in cheek, and one would presume yours isn't either...  I'm surprised Mr. Olken hasn't weighed in on his own blog! on this one...

But if I adapt and take your philosophy to everything else in life - I could say:

- toothpaste shouldn't cost more than $.50 a tube!

- toilet tissue shouldn't cost more than $.25 cents a roll!

- a new car shouldn't be more than $5000 dollars!

I just think you are limiting yourself if you have dictums like yours - and you are missing some gems too.  I had a nice Nero d'avola last night - it was $26.99 - ruled out in your book...

Tongue in Cheek?
by Stephen Eliot
Posted on:4/30/2012 6:18:37 PM

Rich,

No, my tongue was not pressed in my cheek, and I am afraid that you have perhaps missed my point. As I said in the opening line of the piece, I flat our disagree with the notion that no wine should cost more that $25.00, and I have wearied with the whinings of those who preach otherwise. If you have followed the CGCW commentary on this site, you know that we have no litmus tests vis a vis price, alcohol, etc. My annoyance lies precisely with those folks who do. I like a good value, but there are plenty of very expensive bottlings that rank as real favorites, and to me are worth every penny.

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