A recently released study of the ten most expensive wines in the world (they are all French) has some startling numbers. Top of the list comes Domaine de la Romanée-Conti 2005 at a staggering $28 thousand per bottle. A further seven of the list of ten also come from the same producer (different vintage years). And if you think that is expensive – you can only purchase it from the producer in a mixed case of twelve bottles – just one bottle of Romanée-Conti plus eleven other wines all at eye-popping prices.
Comparing this wine with more affordable wines raises some thoughts. On the lower shelves of Walmart, you will find wine brands like Barefoot, Yellow Tail and Sutter Farm at $5 or even less. So, is that French wine from Burgundy really 5,000 times better? I don’t think so.
But why is there such a vast price difference? For the mega-expensive wines, the “true” quality of the wine is be affected by where the grapes grow and how the wine is made. Rarity of the wine is also a factor driving up prices. But way more important is the reputation of the wine – a brand image which may have nurtured over decades or even centuries. And the stupendous price demanded is a form of marketing, too.
For the cheap wines, cost is all important. Most of the cost are unrelated to what is inside the bottle. It has been calculated that a bottle of wine without anything inside would cost about $4 by the time it appears on the store shelves – all the non-wine costs like bottle, cork, shipping, marketing, retailer’s margin, taxes and so on. Every cent of these costs spent is squeezed, with huge production and imaginative logistics. For example, that Yellow Tail merlot from Australia was not shipped in bottles over the ocean – it came in a huge tank and was bottled much closer to the consumer.
So, what about our local wines from Georgia? All are produced in a relatively small volumes, so no economies of scale. Most production is sold at the winery, meaning another layer of overheads. Most local wines range from $16 to $26, though a few wineries have enough of a reputation to push some prices to $40, and there is just one selling a $100 bottle.
Compared to what you can find on the shelves of the package store, our Georgia wines may seem rather expensive. But the costs of running a wine business and reinvesting in new vines, winemaking equipment and marketing are vital to growing the industry.