Although wine pricing may seem a big mystery, there’s a method behind the perceived madness.
From internal winery costs to added fees from importers, distributors, and restaurants or retailers, several key factors determine what a bottle will cost by the time it reaches drinker. We asked four industry experts to weigh in on how a wine’s price is determined, from production to final sale.
Production costs behind the bottle
California-based winemaker Joel Burt of Las Jaras says that the final price of his wines are primarily determined by the cost of the grapes. This sentiment is echoed by others across the industry.
“The cost of land in some areas is very high,” says Roberta Ceretto, director of communications and marketing at Ceretto winery in Piedmont. Ceretto explains that high land prices can be attributed to numerous factors, including lack of availability, as well as difficult conditions (vineyards on steep slopes, for example) which require pricier manual labor versus machines.
“When [my family] first started to invest in vineyards, the land was not considered a valuable asset, because producers were not conscious of the treasure they were sitting on,” says Ceretto. Fast forward a few decades, and the 5.5-hectare plot of Brunate (Barolo) that her family purchased for approximately $33,000, can now go for up to $1.1m per hectare.
Christy Frank, advanced sommelier and partner at Copake Wine Works says that a vineyard acre in Napa Valley will be “wildly more expensive” than an acre in Vermont or Wisconsin, which in turn impacts the price of wines from those regions. Sought-after land can also create supply-and-demand issues, which will drive up prices.
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