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Bringing Wine Prices Down to Earth

When you look at the price of wine, the challenge is to find quality at a reasonable price. There are various things to consider in order to achieve this laudable goal. Before we go there, we should first have a brief look at the history of wine prices. People frequently say that the price of wine has increased dramatically since the 1970s, when the baby boomers reached drinking age and, typically, defined what is today’s sophisticated industry. But that is not really the case.

Wine has been a part of civilization for thousands of years. Consider the price of Italian wine made in 50 BCE. While Julius Caesar was conquering Gaul, Italian wine merchants were selling wine there. As Tom Holland wrote in his book Rubicon: The Last Years of the Roman Republic: “By Caesar’s time the exchange rate had stabilized at a jar of wine for one slave, which, at least as far as the Italians were concerned, made for a fabulously profitable import-export business.” Italian wine was a closely guarded commodity in those days.

Fast-forward to the 1970s, French wines were by then well-established, unlike, for instance, California wines which were just getting started. A bottle of Chateau Mouton Rothschild, a renowned Bordeaux blend since 1853, could be purchased for around $20. Today the 2019 vintage is selling at BC Liquor Stores for $1,500! Contrast that with Robert Mondavi Winery, established in 1966, whose Napa Valley Cabernet Sauvignon sold in the 1970s for about $10. Today the 2019 vintage can be had for $60.

These significant price increases are due to a combination of factors, starting with inflation, which has had a major impact on the prices of goods and services in general, and wine has been no exception. As the cost of living has increased, so too has the cost of wine. In addition to this, reputation, production size, land cost, the increasing popularity and quality of wine have also contributed to higher prices.

In order to calculate today’s price in 1970 dollars, we applied the Consumer Price Index (CPI) to adjust for inflation. The CPI in 1970 was 38.8, while the CPI in 2022 was 292.7. For example, the Mouton Rothschild at $20 in 1970 would be $150 today using 1970 dollars. At BC Liquor Stores, the 2019 Mouton Rothschild is an eye-popping $1,500, more than ten times its 1970s price. In contrast, the Mondavi should be $75 using 1970 dollars, but its price is a mere $60.

Enter supply and demand: Mouton Rothschild has reputation, the reputation of Bordeaux and a long history, and is thus in high demand. The Mondavi Cabernet Sauvignon, on the other hand, is a relative newcomer, and its price has essentially kept pace with inflation. Another reason is Mouton Rothschild produces about 20,000 cases per year whereas Mondavi makes about 100,000 cases.

Crossing the Rubicon back in Italy, Sassicaia was the first Super Tuscan to be introduced to the world in 1968 at about $10 per bottle. Today it should cost about $75 using 1970 dollars, but its price at BC Liquor Stores is $266. This premium is explained by its superb quality and its limited production of 10,000 cases per year. Other Super Tuscans are more modest and can be purchased in the $30 to$50 range. (For a selection of these wines, see our article Super Tuscan Wine in a Nutshell.)

Which brings us to our last point: the seemingly ever-expanding wine industry. There are new wines being constantly introduced which, together with ever-improving wine-making techniques, offer stiff competition to the established wines. They offer comparable quality at bargain prices. Argentina offers many different reds with scores of 90 and 91 points in the $30 to $40 range. British Columbia is one of the youngest wine regions and now boasts over 300 wineries. We expect its trajectory to mirror that of California (with its forty year head-start).

To find quality wine at a reasonable price, try newer labels which are not yet established. This of course is an ongoing process since, as they gain in reputation, their prices inevitably increase. Our tasting notes focus on these wines.

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