2017 update: Are wine prices rising?
by Wine Curmudgeon Posted On
List prices for many wines may be higher, but wine prices in stores don’t seem to be going anywhere
Does it seem like I’m reviewing more expensive wine on the blog, and not the usual $8 to $12 bottles? Does that mean wine prices are creeping up?
Not really. Rather, it’s a function of two things – higher list prices, though not necessarily higher prices being charged in stores. Second, the decline in quality wine costing less than $12, making it more difficult for me to find wine that’s worth reviewing.
The first reason matters because the samples I get give list prices, and not prices in stores. So if the list price says $15, that’s what I have to go by. But these prices aren’t necessarily what’s really being charged. There is still tremendous discounting going on across the country, despite the growth in sales for labels costing more than $15. That’s why I’ve started trying to list street prices for wines in the reviews when I review samples.
The second reason is a continuation of something that started a couple of years ago and shows no signs of letting up. It’s particularly true for cheap California wine, but I’ve seen it everywhere in the world. The idea is to spend as little as possible on grapes and winemaking, stick to a formula, and produce a wine that is as interesting as a blank piece of paper but that scores with focus groups — and is so cheap to make that it can be profitable even with very low margins.
So, no, wine prices aren’t creeping up. It has just become more difficult to find quality wine at the prices most of us want to pay. But not to worry – I’m not ready to give up yet.
$10 is still a magic number for many supermarket wine buyers. The problem is, as you know well, $10 is not $10 anymore.
I used a reverse inflation calculator. $10 today is equal to $9.39 in 2012 because under Barack Obama we had relatively low inflation.
But $10 today is equal to only $8.48 in 2007.
And $10 today is only $7.36 in 2002.
The psychological barrier hasn’t changed. But, as you point out, the amount spent on the product has, in part out of necessity.
If you want to consider distributor take, it’s even worse. If a wine is $10 in your supermarket, the retailer is probably making $2.50. The distributor is probably making $2.50. That means the winery is getting $5. Those numbers haven’t changed since 2002.
But the $5 the winery gets today — and this is a California winery, mind you, without export costs to consider — is the equivalent of only $3.68 in 2002. That money has to cover all of the winery’s costs: grapes, labor, packaging, etc. You just can’t make much wine for $5. Even less if you think that money is only worth $3.68.