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The prices of top wines have risen at a far steeper rate than the prices of many other luxury goods.
WINE

How income inequality has erased your chance to drink the great wines

30/10/2020 - 05:50

AMONG the many ways the rich are different from you and me: Only they can afford grand cru Burgundy.

That wasn't always the case. In the 1990s, middle-class wine lovers could still afford to experience that rite of passage - drinking a truly great wine, not simply to enjoy it but to understand what qualities made it exceptional in the eyes of history.

It might have been a splurge, perhaps requiring a few sacrifices. But it was feasible, just as it was possible to buy first-growth Bordeaux, or the top wines of Barolo, Brunello di Montalcino or Napa Valley cabernet sauvignon, to name a few other standard-bearers.

For example, back in 1994, a bottle of Comte Georges de Vogüé Musigny 1991, a grand cru, retailed for US$80 (the equivalent of US$141 in 2020, accounting for inflation). Today, that bottle costs about US$800.

In a more extreme case, Domaine de la Romanée-Conti La Tâche 1990, another grand cru and one of the world's great wines, cost US$285 in 1993 (US$513 in 2020, accounting for inflation). That's no small sum then or now, but profoundly curious people might have found a way.

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Today, a bottle of the 2017 La Tâche goes for about US$5,000, well out of reach for dedicated students of wine, except for the most wealthy.

Plenty of other options exist: Village Burgundy rather than grand cru, or any of the many other great wines now being produced around the world. But these bottles, as good as they may be, have not been part of a conversation that has endured for centuries.

For wine lovers, drinking such renowned bottles would be the equivalent of a college course in Shakespeare, Beethoven or Charlie Parker. In any field, it's necessary to comprehend the reference points, the benchmarks that connote greatness, to join that conversation even if ultimately you choose to argue the point.

These days, it is impossible for most people to pay for these wines.

You could argue that prices have risen on all sorts of consumer goods since then. Why should wine be different? You would not be wrong.

But the issue is not simply that prices in general have gone up. The prices of top wines have risen at a far steeper rate than the prices of many other luxury goods. La Tâche 2017 is almost 18 times as expensive as the 1990, while a basic Hermès Birkin 30 bag, the grand cru of handbags, has gone from about US$3,000 in 1990 to US$11,000 in 2020, not quite four times as much.

Bordeaux operates on a slightly different scale than Burgundy. Far more wine is produced. But it, too, has its benchmark wines, and like Burgundy, the prices have skyrocketed.

Orley Ashenfelter, an economics professor at Princeton University, has closely tracked the Bordeaux market for years. In 1980, the price of a first-growth Bordeaux was roughly four times the price of a fifth-growth Bordeaux, he said in a phone interview, referring to an 1855 classification that ranked top Médoc producers in five tiers, or growths. Nowadays, he said, as prices have risen for all these top wines, the ratio between first- and fifth-growth price is more like 10-to-1.

What accounts for these disparities?

Partly it's the good old law of supply and demand. Great wine is tied to finite pieces of land and to the rhythms of agriculture. With a limited quantity of grapes and only one opportunity to make wine each year, production cannot be increased to meet rising demand.

With the exception of certain top Champagnes like Dom Pérignon, which are not linked to particular vineyards, the best wines are not luxury goods like watches or handbags in which production can grow to meet demand. Nor can production be kept artificially low, for that matter, to create demand.

Though the problem matters to wine lovers, the rising inaccessibility of fancy wines is just a microscopic example of how income inequality and the concentration of wealth in fewer hands have affected daily life.

I live in Manhattan, where, until the pandemic at least, the price of Manhattan real estate has soared for decades as more people and companies competed for a fixed amount of space. Predictably, Manhattan became harder to afford for small businesses, struggling artists and writers, not to mention civil servants, police officers or firefighters.

Yet billionaires continue to vie for space. A hedge fund billionaire paid US$238 million for a new apartment in 2019, in a building constructed only after dozens of middle-class tenants were evicted from their apartments. When billionaires decide that they want something, whether an apartment or a bottle of wine, it drives up prices for everybody else.

Fortunately, great wines are being produced all over the world nowadays. Those who are fascinated by how wine can express in intricate detail the characteristics of a place and culture can turn to German rieslings, the chenin blancs of Savennières, Chianti Classicos and Priorats.

They also have many other less-expensive options, in places like Burgundy and Bordeaux, wines that are highly pleasurable and offer a taste of what the fuss is about, even if they don't tell the full story. NYTIMES