Wine prices 2018: Are too high prices unsustainable? Is a bubble forming?
Twice in the last week, completely unbidden, a retailer and an importer complained to me about too high wine prices. No one was more surprised than I was.
After all, the Wine Curmudgeon is supposed to care about this, not people who make their living selling wine at what I consider too high prices. But the wine world is so upside down in the second decade of the 21st century that even this is possible.
So yes, a small sample size. But I’ve been doing this a long time, and those things just don’t happen. It’s a man biting a dog story – it happens so infrequently that it’s news when it does, even with a small sample size.
Specifically, the two men were complaining about too high red Bordeaux prices, the wine from France, and how they have screwed up the marketplace. Their point: When the most prestigious are priced too high – $800 for a bottle of Cheval Blanc, anyone? – that raises the price for every other red Bordeaux, regardless of quality (the economic theory of substitutes). Plus, it also props up the prices of prestigious red wines elsewhere in the world, as well as less prestigious wines.
You and I see this every day when we buy an ordinary bottle of red French wine. Or, rather, when we don’t buy one because the prices are too high. I paid $18 for a delightful red blend from the Languedoc, Chateau La Roque, which should not have cost $18. It’s from a minor region and made with grenache, not cabernet sauvigon. But the substitute theory prices it at $18 because “better” wines cost $25 and $30. It’s the same reason all those syrupy, over-ripe California reds cost $18. It’s not the land cost or the quality of the grapes, but the substitute theory.
So what does it mean that the importer and the retailer complained to me about this? Is it an indication that a bubble may be forming and this kind of pricing is unsustainable? There seems to be evidence for this. A highly respected economist who studies the wine business has told me twice this summer that U.S. sales are flat and he is not optimistic about the future. And then there is the Wine Curmudgeon sample index – not very scientific but which seems to make more sense every year. This spring, for example, a PR flack pitched me “affordable” $40 wine – a Twilight Zone version of reality that only someone in the wine business could believe.
So we wait and see. And hope for the best.