Michel Bettane on the current cost of wine.
Michel Bettane looks at the inequities of wine prices and wonders about the sustainability of wine prices both high and low.
Looking at wine prices globally, I see that Chinese demand for ultra-speculative wines is falling. All the thousand-euro bottles of Bourgogne Aligote, €400 bottles of Jura white, €600 bottles (and more) of famous Bordeaux en primeur, €1,000–10,000 bottles of Burgundy grands crus—investors aren’t buying, and merchants aren’t selling. And not before time. Whether we’re talking about a few thousand bottles or just two or three, this is a case of the tree hiding the forest—a forest of wines sold at obscene prices for what is in the end just an agricultural product. If we must let market forces prevail, let us at least acknowledge that the consumer has the right to know what’s really going on here—how it is that the wine market is being driven by greedy connoisseurs, entrepreneurs, and makers and sellers of wine who are only in it for the money.
The production cost of fine wine significantly varies due to several factors, including the initial investment in vineyards which can surpass €1 million per hectare. While some wines are produced at a cost as low as €8 per bottle, others may cost €100. However, considering an average output of 30-35hl/ha across a decade, it’s rare for wines to warrant a wholesale price above €30 per bottle. Nevertheless, wines like a Corton being sold for €100 a bottle can yield a tenfold profit compared to wines like Chinon, depicting a significant gain for its producers. Meanwhile, a top-tier Médoc cru classé which may fetch up to €150 per bottle pre-bottling, can earn substantial financial rewards, in contrast to a Médoc cru bourgeois that might get only a fraction of this price despite similar quality and craftsmanship.
Similarly, while French restaurants often achieve profit margins ranging between 30 to 50%, a Michelin-starred restaurant can mark up prices significantly, sometimes to a tenfold profit from the wine’s initial cost, for a product that took two years to produce. petits vins, despite being quick to prepare, might be commercialized at ten times the wholesale cost. Ironically, wines in restaurants are often served too soon after purchase, at improper temperatures, and without consideration for the pairing with meals or the type of glass.
Given these issues, it’s not shocking that global wine production and consumption are declining. Vineyards are being removed, producers are facing bankruptcy, and challenges arise in passing down wine estates to forthcoming generations. France’s high taxation aggravates these problems. If not addressed, the legacy and craftsmanship of wine making might fade, diminishing a vital part of cultural heritage in France and other wine-producing nations. Wine consumption, once a cultural norm, has now become a personal choice in the face of increasing anti-alcohol advocacy and the influx of non-alcoholic alternatives. Despite these trends, inventive marketing continues to successfully promote even the most unlikely products, such as “dealcoholized” wine, driven by the enticing prospect of high profit margins.
It is crucial that the individuals generating exorbitant profits from selling the world’s most exceptional wines learn a crucial lesson—particularly at this juncture, with imminent peril looming like the sword of Damocles, and with climate change threatening to unleash unparalleled calamities, casting even more doubt on the sustainability of their ventures.