Wine may well be the original International Man of Mystery. Since wine isn’t (and can’t be) made everywhere, it must travel from often remote locales and through many hands to arrive on your table. To be frank, not much of its sales chain has ever been very transparent, that being the mystery part. No surprise, then, when questions arise about what exactly one is getting for one’s money.
Even if you have enjoyed a perfectly satisfactory bottle for which you paid a perfectly reasonable price, you can still be left scratching your head over how that particular price was set. Is wine pricing really just arbitrary, or is price linked to quality in some logical, orderly way?
Part of the problem is that it’s not really possible, without a fair amount of experience, to determine what might distinguish different bottles, in quality terms, from each other simply by comparing labels. The appellation system of organizing wine was created to establish more or less fixed hierarchies for it, and, in general, you can expect to pay the least amount of money for wine of no stated provenance at all (Vin de France, for example) and the highest price for wine with the pedigree of a single, prestige vineyard or vineyard parcel owned by a highly-decorated, historic estate. So far so good.
It’s certainly true that virtually every step a winemaker on any rung of this ladder takes that is legitimately aimed at improving quality — yield-reducing pruning; hand harvesting; time spent at the sorting table — costs the producer both time and money. It’s also worth bearing in mind that, as with many other products, a bottle of wine returns a surprisingly small fraction of the price paid by the consumer to its source.
There are typically multiple middlemen involved: brokers, marketers, importers, wholesaler/distributors, plus shipping costs, tariffs, taxes and, at the very end of the line, retailers like us. But these costs are largely fixed, calculated as a markup of the price paid by the nearest prior link in the chain. These don’t entail contributions to the quality of the product, which was settled once and for all the day it left the winemaker’s cellar.
It’s fair, if extremely generalizing, to assert that up to something like $50 or $60 retail per bottle the link between the pure costs of production and the eventual shelf price is more direct; more obvious and less questionable. Although there’s nothing hard and fast about this range and certain extremely low-yield, labor-intensive specialty wines don’t qualify for this rough bracketing.
Beyond this, there are the very real effects of supply and demand to take into account, as well as the effects of marketing budgets, the opinions of critics, trends, fashion and many other moral, rather than material, factors. True, the price of wine on the shelf must always incorporate the winemaker’s costs of production as some kind of starting point. It’s worth noting that when we ask our vendors for some enlightenment on why a certain wine is being offered at the price it is, the response is often a shrug. They typically have little light to shed on the question.
You needn’t be a math whiz to see that with respect to the lowest end of the market, the wine itself will make up a smaller percentage of production costs relative to its wrappings (bottle, closure, labels, carton). It’s very hard to build in quality, even if you are motivated to, when packaging costs make up half the expense sunk into a wine you may be selling for a scant $3 a bottle.
Ultimately, only you can judge whether the price you paid was right, fair or justified. But it matters for the soundness of your opinion that you have some idea of what was involved in arriving at it. If it’s any comfort, the smaller-scale, family operations we favor and champion at FK aren’t getting rich making wine. Their motivations appear to lie elsewhere.