Have you ever wondered why there are very significant differences in how wine is priced? There are wines that you can easily buy for as little as $8 per bottle while others are priced at around $20 to $30 per bottle. However, some wines can fetch thousands if not hundreds of thousands of dollars. All wine is made from grapes through a standard winemaking process. So why are some wines priced too much than others?
There are a few factors that determine how a bottle of wine is priced. The basics of pricing will involve the raw materials of grapes being used. There are a lot of grape varieties that may be used in the winemaking industry. However, not all grapes are grown equally. Some grape varieties, especially those that are considered old vines are more expensive since these varieties were remnants of the varieties that almost got wiped out during the great Phylloxera plague during the 1850s. Since these old vines are almost extinct, they are grown with the utmost care and handling. They, therefore, command a premium price. Likewise, the cost of production is also factored in such as the type of barrels used for the ageing process and the techniques in winemaking. Where the wine is being sold is also a factor in the pricing. Buying the same bottle of wine from a grocery store will be less expensive than buying it in a restaurant.
Another factor in pricing wine is the “perceived value” of the bottle. This perceived value is affected by factors such as who owned the wine before or how old the wine is. Vintage and rare wine demand premium price, especially if there are people that are actively seeking that particular date. The previous owner of the bottle will also significantly affect its price. Take, for example, a bottle of Chateau Lafite 1787 which was believed to have been part of Thomas Jefferson’s rare collection of vintages. The bottle sold for $156,450 in 1985. Other notable wines that fetched the highest prices are as follows:
$38,420 for Penfolds Grange Hermitage. There is a belief that only wines coming from European countries can fetch a high price because of their long history of winemaking. However, the Australian wine Penfolds Grange Hermitage 1951 fetched a price of $38,420 for a single bottle. The price of this bottle went up because of the perception that only twenty bottles of it are still known to exist around the world.
$135,125 for a 1947 Cheval Blanc. Often, Mother Nature has a hand in the pricing of wine. Take, for example, a single bottle of 1947 Cheval Blanc which was bought for $135,125. There is a perception that because the year this wine was made was significantly hotter; the wine was produced with higher sugar levels which many believed in making it the finest Chevel Blanc wine produced in the 20th century.
$225,000 for Chateau Margaux. The wine collection of Thomas Jefferson is highly sought-after. With the Chateau Lafite mentioned earlier fetching for $156,450 for one bottle, another Jefferson bottle of Chateau Margaux 1787 was set to be sold for $500,000. However, the bottle broke as a waiter accidentally knocked it over. The insurer for that particular bottle only paid no more than $225,000 though.
$500,000 for 1992 Screaming Eagle Cabernet. A 1992 Cabernet bottle is not as old and as vintage as its Old-World counterparts. However, when a bottle was auctioned off for a charity event, the bids for the bottle reached up to $500,000.
When asked whether or not the tastes of these bottles mentioned are significantly better than the wine that can be bought for $30 or less, we can only imagine the answer since the buyers of these bottles may not be in a hurry to open and taste them as well.