Why do wine prices vary so much?

If you’re at all like me, you find that the more you learn about wine, the more questions you have. Many revolve around pricing, why some wines cost more than others. Have you ever had a wine and thought it tasted expensive, only to find it was $15? Or, the opposite can happen with a wine you don’t think is that great, but costs $50. Although wine tasting is subjective, most agree on what makes a good value.

Why is a comparable wine from a country like Chile half the price of one from France? Why are many wines so much more expensive in Halifax than the United States, or even Ontario?

The wine business is not for the faint of heart. There’s a huge investment for a return that takes years to recoup. The cost of land, equipment and facilities to ferment, vinify, store and bottle wine can run millions. Then there’s the wait: wait for the land to be ready to plant, wait several years for the first crop and, finally, for the wine to be ready to bottle and sell. If you factor in unpredictable Mother Nature, this process to get juice to bottle is downright difficult.

Much of the cost of the bottle we purchase comes from the cost of the land and the labour to harvest and process the grapes. It’s cheaper to buy land and pay employees in Argentina than it is in Napa, California. This difference is enough to influence pricing, hence why we look to certain countries to provide us with “value wines.” So, rather than focusing on affordable, everyday wines, an expensive growing region like Napa has taken the course of marketing higher-priced wines and emphasizing quality in each bottle.

I recently read an article on wine costing. It showed that the cost of a particular wine in a study from Chile was actually less than the cost of the bottle and cork it comes with. The actual price of the wine that many of these producers get is less than $3 per bottle.

Now we can think about what happens to that wine after the producer has been paid $3 per bottle. First, it’s picked up by the shipper who can charge as much as $5 to $10 per case of 12 to get it to Halifax. Then things get really interesting. Excise taxes add up to about 15 per cent, duty adds another few cents per bottle. Once the wine lands, it belongs to the government and they take anywhere from 100 to 150 per cent markup on the cost per bottle. The import agent gets 10 to 15 per cent of the wholesale cost, HST is 15 per cent, and bottle deposit is $.20. The end result: that $3 bottle of wine costs $12 to get to your table.

From my experience, the best values under $25 usually come from Chile, Argentina and, sometimes, Australia. Spain and Italy can also provide good values if you look around. If money is no object, then France, Italy and California are where you’ll find great wines at higher prices.

The under-$25 wine review

De Morgenzon DMZ Chardonnay 2011
South Africa, Bishop’s Cellar, $19.49

The nose is distinctively Chardonnay with lovely ripe melon, banana peel and vanilla. But there’s also an underlying note of crushed gravel, which tells us the wine has minerality. Minerality is our friend, it gives balance and structure. Smooth, showing some initial weight and then a burst of tropical fruit. Clean finish. A great wine to balance out the richness of fettuccine alfredo. 90/100

Benanti Rosso di Verzella, Negrello 2009
Italy, Bishop’s Cellar, $24.49

Now and then you come across a wine that’s completely unexpected in taste and style. This is one of those wines. Made from bush vines of the Negrello grape, it’s almost rustic in style. Earthy and woody cherry characteristics. Not a big wine; compares in weight to Pinot Noir. Full of plump cherry flavours and balanced with light tannins. Proof that Sicily can make some great wines. Delicious with a fish stew made with fresh tomatoes but also great on its own. 91/100

80–84: A great sipper, good value.
85–89: Won’t last long, great value.
90–94: Brag to your friends and buy a case—fantastic.
95–100: A classic, run to the store, extremely rare.

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