What Price Glory?

by Steven Fox

I’m on e-mail lists marketing 2009 Bordeaux futures. The pricing is steep -- Steep as in the peaks of Mount Everest.

The first growths, with expected pre-release prices at about $900.00 a bottle make the 2009 Bordeaux wines priced at $125.00 to $300.00 seem like a bargain. Now keep in mind these are opening prices: what one pays nearly two years prior to actual delivery. Theoretically, once the wines hit the shelves, the prices will be higher.

The 2009 Bordeaux mania, combined with the current economic climate, got me thinking about the fundamental question: What is the most anyone should pay for a bottle of wine?

There are many answers to that question because everyone has their own comfort zone and degree of engagement with wine.

I know a famous, highly successful artist who absolutely adores Bordeaux, and he refuses to pay more than $40.00 a bottle for it.

Many of our customers draw the line at $25.00. -- Some even less than that.

On the other end of the spectrum, auctions and restaurant lists are full of wines priced at hundreds, even thousands of dollars a bottle, and generally speaking, there’s no shortage of buyers.

I’ve often stated, when it comes to super expensive wines, it’s not what’s in the bottle so much as it is the right to own the bottle. Supply and demand drive wine pricing. As it is commonly said at auctions where prices skyrocket: All it takes are two rich idiots.

As a long time wine lover, and professional, I do believe, up to a point, that many wines merit triple digit pricing.

In order to make a great wine, numerous expensive investment decisions must be made. The price of vineyard land; the price of grapes; decisions about vine spacing and yield; the cost of barrels and equipment, the cost of temperature controlled storage; the impact on cash flow when wines are aged for years prior to their release… all this plus overhead leads to what the final price of a bottle of wine will be.

If you are in Chile where land and labor is cheap, and you make a million cases of wine, you can go to market with a $9.99 bottle of Cabernet Sauvignon. In Napa, if you are dedicated to doing whatever it takes to produce a top tier small production Cabernet Sauvignon, that bottle price may end up at $150.00.

I decided to address the question of what's the maximum price one should pay for a bottle of wine by conducting an unscientific, but highly focused poll -- Questioning only those persons in the wine profession.

There were three categories of wine professionals that were polled.

The first are Manhattan restaurant sommeliers and managers. These are people who maintain and manage their restaurant’s wine program and, on a daily basis, taste wine with distributors, winery representatives, wine-makers and importers. Additionally, they attend wine tastings and industry functions.

The second group is wine distributor sales persons. They represent portfolios of wineries, some up to three hundred different producers and thousands of labels.

The last group is wine retailers. As with the restaurant professionals, they taste new wines on a daily basis and attend numerous trade functions.

It is hard to estimate the number of wines tasted in any given year by these individuals, but its certainly well into the hundreds. In tasting so many wines, one deeply understands the relationship between price and value. Therefore I polled thirty professions with the basic question:

On a personal level, using your own money: what is the most you would pay for a bottle of wine?

The range of answers was $75.00 to $500.00 a bottle.

There were four persons under $100.00 and two said $500.00.

The vast majority were around $125.00 to $150.00.

For me personally, I would go up to $300.00 but there is an asterisk with that amount: It has to be for a Grand or Premier Cru Burgundy. You see I am afflicted with the Burgundy bug. It’s a sickness that attacks common sense, self-control and practical considerations about wine purchases. Pray that you never catch it.

For any other wine, I agree with the majority -- $150.00 would be my limit.