Jamie Goode: Ever-rising wine prices – problematic or not?

I was involved in an interesting discussion about the price of wine recently (see Tim James on the topic here). A few of us were regretting recent price rises for some of our favourite wines, but we were berated by others for taking this position. In an industry struggling with profitability, how can rising prices of wines ever be a problem? In some cases, perverse as it sounds, I think they can.

We all have stories about wines we’ve enjoyed suddenly becoming out of reach. Back in 2000, my first en primeur purchase was for a case of Jamet’s 1999 Côte Rôtie at £20 a bottle. Now this wine would be eight times this on release. In October 2019 I paid £344 for 12 bottles of Bernard Bonin Initiales Bourgogne Blanc 2016. This works out at £28.67 a bottle. On Wine-Searcher this is now showing as £250-plus a bottle. I remember visiting Olivier Collin at Champagne Ulysses Collin in 2017, and was amazed by the wines. They were wines I could afford, even in restaurants, but not any more. And for those who have been buying Burgundy for many years, bottles they purchased with a view to drinking are now worth as much as a decent second-hand car, which makes it tricky to pull the cork even for those with high disposable income. And price inflation has even reached the natural wine world, where wines that used to be hard to find but affordable – like Overnoy, Miroirs and Ganevat – are not hard to find and insanely expensive.

Examples like this are not abundant. Wines that were the insider’s tips for being top quality but without commanding high-end prices have recently come onto the radar of wealthy collectors who aren’t in the least price sensitive. And they are made in limited quantities, so supply and demand are out of whack. Where people with deep wallets are involved in pursuit, you have the perfect storm for barmy price time. That’s what we are lamenting.

As is usual in many discussions on wine, of you don’t segment the market, you get into trouble. Of course, at the bottom end of the market, producers are squeezed for profitability and they really need a price increase. But this is a very different world to the one my friends and I were discussing. There, even the producers are finding some of the market prices for their wines a bit of a problem. When you start out making wine it must be a dream if your wine is in such demand that it takes no effort to sell it. Excessive demand, however, can be an issue. People get upset if they can’t buy the wine that they’ve been buying in previous years because their allocations have been cut, whether they are private customers or trade customers. Increased demand often leads to an increased market value for your wine, and if you don’t make that extra margin, someone else will.

The obvious answer is to manage demand by increasing the price to the point that the demand is in step with supply. But many producers are keen not to upset the customers who have supported them over many years. Such sentimentality might sound appallingly weak to hard-nosed capitalists, who have an unwavering faith in the market to sort things out. Much of the wine world, though, is built on more human principles of relationship, and valuing loyalty, and there are quite a few winegrowers who’d prefer that their wines were drunk, rather than endlessly traded, or treated like investment vehicles, or used in ugly conspicuous consumption rituals.

The grey market has always been with us in the wine world, but it is particularly jarring for many natural winegrowers. There’s a philosophical slant to the natural wine scene that means that many would like their wines to be affordable to all with an interest in wine, and are horrified to see them changing hands for ten to twenty times their release prices, and drunk in situations discordant to the natural wine ethos.

Wine – even interesting wine – is food. It is something we consume, and something that creates a beautiful openness and spirit of sharing at the table. One of the great things about some of the top South African wines is that people on a normal professional salary can afford to buy them and open them, and share with friends. There’s a lot of fun to be had in the price range of R200-500, and it would be a shame if the interesting stuff all headed north of R1000. This would seriously disrupt the culture of wine. Of course, part of sustainability is financial sustainability, but price rises at the top end are beginning to be problematic for the wine trade, even though we might wish for them at the bottom of the market.

• Jamie Goode is a London-based wine writer, lecturer, wine judge and book author. With a PhD in plant biology, he worked as a science editor, before starting wineanorak.com, one of the world’s most popular wine websites.

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