Why are Great Red Wines So Expensive?

Great red wines or vintage red wines are expensive luxury drinks. This is particularly the case of the prestigious Grand Cru. Moreover, to deserve this title, the production of the wine must respect several rules of culture that include a strictly regulated geographical origin, the size of the vine, the method of harvesting the grapes, the average durations of aging of the wine, etc. We will see in more detail in the following lines why a fine red wine can cost up to 3000 dollars.

The Scarcity of Fine Red Wines?

This is of course primarily due to the scarcity effect. Vintage red wines are generally produced in reduced quantities, which allows properties such as mouton rotschild to sell them at a much higher price than the cost price. Then, a fairly clear ostentation effect pushes people who can afford it to compete to buy luxury red wines. That increases prices even more, especially since the number of people playing this game has exploded since the economic take-off of Asia (notably China) in the 2000s. So, 10 times as many rich buyers for as much wine. The skyrocketing prices are the obvious result!

The Value Chain of Red Wines

Of course, intermediaries such as brokers and traders as well as distributors add their mark-up. Despite this, it is not so much in that direction that we must look to understand those high prices. As a matter of fact, vintage wines are loss leaders for top-of-the-range distributors who conduct fairly tough competition in order to attract a wealthy clientele and therefore generally earn less on these wines, especially since the costs for transporting, storing, handling and delivering such precious bottles are often high. By the way, a Grand Cru always comes from France, particularly in the Bordeaux region.

The Production and Harvesting Methods

Each fine wine followed strict growing and vinification methods. They come from prestigious vineyards held and managed by competent winegrowers. Moreover, luxury vineyards are always harvested by hand. Some properties even harvest the grapes at night to improve the quality of the end product. Afterwards, the red wines are kept for years in cellars for them to become vintage wines. Several years of aging are needed before selling them. In a nutshell, producing a fine red wine is a long process that requires in-depth know-how at each step. All these explain why red wines, especially Grands Crus are so expensive.