Wine — what is, for all intents and purposes, an agricultural product — has become defined by certain segments of society as liquid gold. More than a weeknight tipple or even a celebratory treat, wine has become a monetary status symbol that can fetch more cash than any other comestible.
Why is that? What is it about wine that drives people to spend unthinkable amounts of money? To comprehend this seemingly insane trend in consumer behavior, you need to start thinking about wine not as what it actually is — a bottled beverage to be consumed and enjoyed — but as a financial asset that is bought, sold, traded, and auctioned off like high-ticket real estate property, fine art, stocks or bonds.
While the storied wines of Bordeaux typically top the charts of most expensive wines sold, the most extravagantly priced bottle of wine currently on the market is not made in France, but in Australia. The 2004 Kalimna Block 42 Cabernet Sauvignon made by the Australian powerhouse, Penfolds is priced at $170,350 per bottle. According to the World Records Academy, this luxurious Aussie bottling has set the new world record for most expensive wine.
These days, fine wine is not only auctioned by the usual suspects like Christie’s, Sotheby’s, and Bonhams & Butterfields, but by specialized auction houses like Zachy’s, Acker Merrall & Condit, The Chicago Wine Company, and Hart Davis Hart that deal exclusively in fine wines. The proliferation of wine-centric auction houses as well as online wine auction sites like winebid.com, cellarbid.com, vinfolio.com, winegavel.com, and winecommune.com is evidence that there’s a sizable community of gavel-wielding consumers that avidly believes in wine’s investment potential.
So who exactly comprises this community of high-ticket wine buyers and what guides their purchases? Be it successful businessmen with a significant amount of disposable income, or corporations looking for prime short- or long-term investments, buyers of expensive wines tend to consider the brand reputation of the winery as much as they do the wine itself. Much of what makes wine so irrationally expensive has nothing to do with what’s in the bottle and everything to do with brand equity and marketing. This same rationale explains why people spend upwards of $3,000 on a Chanel or Hermès bag. At the end of the day, how expensive is too expensive? Well, if you ask Penfolds, they’ll say there’s no such thing.
Etty Lewensztain is the owner of Plonk Wine Merchants, an online shop focused on small-production, artisanal and altogether great cheap wine. The food- and wine- obsessed Los Angeles native cut her teeth in the wine biz running a marketing campaign to promote Chilean wine in the United States, and is certified by the esteemed Wine & Spirit Education Trust (WSET) and the American Sommelier Association. Plonk Wine Merchants specializes in hidden gems from around the globe and every bottle in the store is priced below $30. Follow Plonk Wine Merchants on Twitter @ PlonkOnline.