Thursday, 28 January 2010

Why wine prices must be capped at both ends

To begin with, I was appalled by this interview. Firstly, it tells a readership of students that a great way to do business is to make the world's priciest Champagne (it costs nearly £1,000 a bottle) and flog it with the help of a superstar. Secondly, don't bother getting an expert to taste it guys (Anthony Rose writes for the Indie, at the very least he could have stepped in) or ask if its value-for-money, because that's not interesting is it? Why let the quality of the product get in the way when you can slap a whopping price tag on it and find a celebrity as an ambassador? I've written similar here.

And then a wave of apathy slopped over the bows of HMS Indignant. I admit I have a lot of sympathy with the make-money-from-the-dumb-rich school of thought. If someone somewhere thinks that a Mariah Carey endorsement and a price tag the size of a charity cheque makes a good bottle of bubbly, fair enough. Go for it. Empty your wallet. You certainly won't hear much protest about the pricing coming from Champagne because, let's be honest, our reply is likely to contain the words 'pot', 'kettle' and 'black'. Remember who's Moet & Chandon's 'brand ambassador'?

But then I steadied the tiller, rang the ship's bell, and set a different course.

Now, imagine you're that gifted of breeds: a winemaker. You've made your wine, it's all labelled and ready to go but you can't decide on the price. Filled with a sense of socialist values, you want to make great wine accessible to the masses, so you consider pricing it at about £6 a bottle. But you're also proud of your wine and it becomes clear that at £6 a bottle, no one is going to take you seriously. Sure, someone might give it the 'good value' or 'good QPR' moniker, but you'll never make a name for yourself. You'll never achieve greatness or cult status, even if your production is tiny.

So you price it at £25 a bottle and people will start to take note.

Now I'm prepared to accept that there are some holes in that scenario: it's always possible that a wine critic might see you as a £6 genius, or that your £25 bottle will be forced down by the market. But, be honest, it holds true.

A perceptive comment on my last blog inferred that there are two different markets - the lower echelon (Jacob's Creek, Yellow Tail, etc) and the more serious wines at a more serious price for more serious people. I might make a case for the middle ground (a third way, perhaps) in wine but I'll let it stand.

Both come in for attack. One is the embodiment of wealth, colossal fortunes and wine collection. This is lambasted by many, especially Robert Parker, because wines are not meant to be collected, they're meant to be drunk.

The other is the exceptionally low-priced wines found in supermarkets. So low that they are the focus of attacks by health groups saying this increases binge drinking. Personally, I never got wasted on cheap wine, but that's another blog.

So my conclusion is thus: wine prices should be capped at both ends. Make a bottle of wine a minimum £10 ($15) spend and make the highest £100 a bottle (perhaps with allowances for experimentation so that if the winemaker can prove he spent, say, £150 per bottle on overheads, he is allowed a decent, but not excessive, profit margin).

Not only do you start to tackle the problem of wine abuse, you tackle the problem of price abuse.

And once you take the motivation of money out of the winemaking equation and out of the satisfaction equation, everyone can get on and enjoy wine for what it is, rather than be concerned about who endorsed it or how many thousands of pounds, dollars or yen it cost.

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