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It is time to talk about wine prices. Why are some bottles dirt cheap while others are as expensive as a new car? And is it possible to taste the difference between the bottom shelf Discount wine and the Classed growth Bordeaux?! These are questions, that millions of people ask themselves every day while shopping for wine and I am trying to answer them today. For that, I asked my wife to prepare three bottles of wine for me that I can taste blind to see whether I can identify which wine is dirt cheap and which one is super-premium …
Wine is unique: Per definition, it has to be an alcoholic drink made from fermented grape juice. Therefore, wine is a pretty simple product that has been made in the same way for thousands of years even though scientific advances have changed the process in the last centuries.
Looking at it from this admittedly simplistic viewpoint one might wonder why there are such big differences in price if all wines are technically the same.
But what makes wine special is that two wines from the same grape variety and the same region can cost anything from 1 Dollar to 10.000 Dollars per bottle. Sure – a wine that costs 1 Dollar has a different cost structure than a wine that is priced in the super-premium segment and only a fraction of the price you pay for a bottle of wine goes to the producer. Depending on the market the bulk will go to taxes, Packaging, Retail Margin, and Logistics.
UK Wine Retailer Bibendum recently released some information on this topic: On a Retail 10 Pound bottle, only 2,70 Pound or 27% will go to wine production.
For a 5 Pound bottle, only 0,31 Pounds or 6 % will go toward the wine
There is, however, also a theoretical maximum you can spend on viticulture and winemaking. The cost heavily depends on various factors but I would say that it is difficult to have a higher production cost than 50 US$.