Price of a Wine
By Dan Berger
There is an old story about a stamp collector whose huge collection includes a very rare stamp, of which there are only two known in existence.
As the story goes, he spends a lot of money, time, and effort to locate the other stamp, buys it, and then burns it up.
As reporters look astounded, one asks why he did so. And he replies, “Now there is only one of these in the world, and I own it.”
This tale may be apocryphal. Here is another probably with a bit more truth to it. A wine maker is asked why his wine is so pricey and his reply is sort of logical: “As long as people are willing to pay to get it, I’ll keep raising my price.”
We have not yet seen a U.S. winery asking $1,000 for a bottle of wine that has no track record, but it surely will happen. Will this price be seen as valid?
As long as there are more buyers than there are bottles, all high prices will be valid.
In the last 20 years, we have all seen Napa Cabernets rise in price as fast as a 1996 Internet IPO, with every winery trying to outdo every other winery with its pricing.
One hits $75. A neighbor rises to $80. Then someone else goes to $105. And pretty soon everyone has to have a triple-digit priced wine.
There is no reality in it, of course. These prices are not predicated on the cost of the product, and they are not based around quality — not, at least, from what I have tasted.
They may be based around a scant quantity produced, because some of the tiniest producers are involved in this game of one-upmanship. But then again, some $100 bottles, and a few at $150, are produced in lots of many thousands of cases.
So what would happen if someone announced that a new project would make a wine that is California’s first quadruple-digit wine? Would this be purely a gimmick?
The mystique that would be created with such a wine would be palpable. Why would the wine, or any wine, wine be worth anything close to that? For one thing, what would it be made from?
We assume that Cabernet Sauvignon would be in its makeup, but what if the owner of this project, call it Chateau Hubris, declined to say what was in it?
Would the wine’s price be based on a review from a wine critic? Chances are that it wouldn’t since at its price it would have to be better than all the other wines out there that already got a score of 100.
Since high-quality wines are usually made in tiny amounts, one would expect that the wine would be extremely limited in availability. But maybe not. I know of a number of wineries that are making $100-and-up wines in amounts of tens of thousands of cases.
But as with any such over-hyped, and typically under-performing, wines there surely will be a number of people who will want to get a bottle of this stuff.
As Sacramento wine merchant Darrell Corti once said, there are an awful lot of people out there with more money than brains.