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The price of wine
is it getting too expensive?

It seems that three things are certain in life: death, taxes and rising wine prices. Thereís no getting around it, but for all but the low-end wines, price rises have outstripped inflation by a comfortable margin over the last decade or so.

At the low end, prices are pegged back by sacred price points (£4.99, £5.99 and £7.99 seem to be the most inviolable), with the result that branders cut the quality of their brands to keep to the price point. But for high-end wines, a variety of influencesóno doubt including supply and demand, but also with a healthy element of merchant and producer Ďambitioníóhave conspired to raise the prices of high-end wines to painful levels.

At the very top level, prices are now simply farcical. Napa Valley Cabernets retailing at £50 a bottle now seem to be the rule rather than the exception. Donít bother going shopping for Bordeaux or Burgundy unless you have at least a crisp £20 note in your pocket, and preferable two or three. £20 is the starting point for top Languedoc wines. Good Barolo will set you back at least £30 a pop. I could go on.

Thereís a growing phenomenon in the world of wine. It seems that wealthy would-be proprietors buy an estate or property harbouring the ambition to make Ďgreatí wine. Taking themselves seriously, they lavish care and attention on the vineyards and winery (a posh new architectural marvel of a building is required), hire a consultant winemaker and then fashion a limited-production marvel of a wine. This is then launched, with fanfare and an appropriately heavy bottle, onto the market at an astronomic price.

Itís largely vanity winemaking, of course. Have you noticed how few of these new estates set out with the ambition to make reliable, good-quality wines that express their sense of place and at a price that most people can afford? Thereís not a lot of humility in these new projects. Very few are willing to make good wine and then build their reputation over several years and even decades.  

It isnít going to happen, partly because of the cost of vineyard land necessitates a relatively rapid return on investment. And because the proprietors have lavish lifestyles that need supporting. Thatís why the worst excesses of this trend have come from California. I suspect there arenít that many people in the Californian wine scene content to make a living, without getting rich.

But it would be wrong to pin all the blame for expensive wine at the door of producer greed. Go to France and travel round the wine regions. There are lots of characterful wines, full of interest and personality, for sale relatively cheaply (with Bordeaux and Burgundy perhaps being the exceptions). You can buy them directly from the producers over there, but if you find the same wines for sale in the UK, be prepared for a bit of a shock. Why? Because a decent wine selling for 10 Euros in France will probably set you back around £15 here in a wine shop.

Itís not all the Chancellorís faultóduty is just over a pound of that bottle price, and VAT is a little less over here than it is in France. Itís because two groups of people have snatched their own fairly healthy margins on the purchase price before the wine has got to you: the agents/wholesalers and the retailers. And letís not even get into the discussion of restaurant prices. This argument doesnít just apply to France, but also to the rest of Europe.

I think itís a shame that we canít get decent European wine here at sensible prices. In particular, I feel for the producers who are knocking out very good affordable wine, but canít sell it at the right price in the UK because of the clumsily expensive UK trade. I donít see why wine should need to more than double in price in its journey from the producerís cellar to the wine shop shelf.

The trade might respond that if we saw the producerís price for a dishwasher or a DVD player, and how much that got marked up in the supply chain, then weíd be equally (or more) appalled. Perhaps this is true, but it still doesnít make me sympathetic to the fact that the producerówho makes the financial, emotional and artistic investment in the productóis the one that appears to be getting stiffed in this supply chain. Readers in the trade will probably accuse me of naivety, and point to the USA where wine costs considerably more, and the fact that relatively few people get rich out of the UK wine trade. Iím just reporting the way things look from here, with my consumerís hat on.

Letís look at this another way. If producers can make a decent living out of winegrowing, this is good for wine because more smart, talented, ambitious people will be persuaded to invest in vineyards and make wine. Look at the revival of appellations such as CŰte RŰtie: a host of small quality-minded producers have emerged in the last decade or so, precisely because they know their efforts will be rewarded.

But if the greed or inefficiency of retailers and agents make wines like this uncompetitive in the UK market, sales will plummet and theyíll put the squeeze on producers to lower prices. The producers are caught in the middle because they need access to market. Or producers will be forced to find a different market, if one exists. The danger is that if thereís no incentive for producers to excel, then eventually this will have a negative impact on the quality of wines that are produced. This would be a great shame.

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