Richard Hemming MW: value is in the glass of the beholder
In 2007, the most expensive bottle at Majestic Wine in Notting Hill Gate was a back vintage of Château Haut-Brion. It cost around £400 and, as manager of the store, it was a source of prestige to have such a costly wine on the shelf.
Because, let’s face it, £400 is a lot of money for a bottle of wine. On a retail manager’s salary, it seemed utterly unaffordable. On a wine writer’s salary, it still does. But everything is relative, and as wine professionals, understanding the function and perception of price and value is vital – especially if our objective is to encourage customers to spend more on wine.
For example, in my new home in Singapore, Jacob’s Creek Merlot costs the equivalent of £23 a bottle retail, more than 400% more expensive than the current shelf price in Morrisons.
But at the other end of the scale, another single varietal Merlot (Petrus 2010) is being sold by Cru World Wine for £3,326 in Singapore but eighty quid more in the UK.
Over on wine-searcher.com, a recently launched index compares prices of Moët & Chandon Brut Impérial around the world. Globally, the average price is around £40, but in Spain it costs around £31 per bottle while in Thailand it’s £100.
In many cases, exchange rates and taxes help explain why there is such a large differential.
For example, in Singapore, duty is a fixed cost of around £5.50 per bottle, but VAT is only 7% – hence more expensive wines can be better value than less expensive wines, relatively speaking.
Value is, of course, subjective. In Singapore, I’m (begrudgingly) happy to spend £22 on a bottle of Guigal Côtes du Rhône (which The Wine Society sells for half that price), because for me, it’s a better value purchase than Jacob’s Creek Merlot.
Meanwhile, someone used to spending £3,326 on a bottle of Petrus might see a £400 Haut-Brion as a bargain. But that’s small change compared with the newly released 2015 vintage of Liber Pater from Bordeaux, costing £30,000 per bottle.
Could that be described as good value? Is Petrus suddenly good value by comparison?
Consider also the Provence rosé boom. On retail shelves, we often find a generic blend at around £12 next to a reserve cuvée (from the same producer) costing a few quid more.
The better value buy is nearly always the cheaper of the two – thus drinkers feel reassured about paying £12, despite the fact that it is twice the average UK price. Whereas you could argue that the priciest rosé, Garrus, is actually under-priced at £110 per bottle, when you consider that top French reds cost 300 times that.
If we want to persuade wine drinkers at every level to spend more on their wine, then we need to understand their varying attitudes to value.
The most crucial tool for selling wine is the story behind each bottle – and the perception of value is a vital part of that.