Are You Getting Good Value When You Buy Wine?
Sunday, 6th July, 2014
A favourite topic of mine is wine prices and I like comparing types of wines and whether the retail price meets the expectation of the customer. It is a fascinating topic.
Here are some views:
"While most of those who receive this newsletter would not normally (or ever?) buy a wine with a price of less than $10, there are occasions when knowledge of some of the best can be useful. Gifts to relatives (if they don't know better), beach barbecues, fishing trips and the like are obvious purchase circumstances. But it's also surprising how many times I am asked for advice on what wine to buy, only to find that the person asking the question thinks $15 is expensive, and $10 reasonable."James Halliday, Wine Companion, 13th March, 2013.
"As has often been shown, the neural representation of experienced pleasantness is determined by the knowledge of the price of a wine (Plassmann et al. 2007). That is, if we think a wine is expensive we perceive its quality as being superior, all other things being equal. This suggests that, on many occasions, quality is not an objective trait of a commodity, it rather seems to be what we want it to be."Orley Ashenfelter, Olivier Gergaud, Victor Ginsburgh, Karl Storchmann, 1st March 2013 VOXEU.ORG.
"A wine industry friend is a member of a prestigious golf club. Most of his fellow members are interested in wine and regularly quiz him about it. Do they ask about the latest Grange? The top Bordeaux? Not on your life. The most common question is, 'What are the best wines available for less than $20 a bottle?'"Ralph Kyte Powell, The Age, 2014.
These quotes suggest:
1. Those with great knowledge of wine are surprised when asked what is good and cheap. They know that the best wines do cost more, often much more. Can good and cheap belong together?
2. Consumers use price as a guide to quality as they have great difficulty making conclusions about quality based on their own tasting abilities.
3. It follows that if a consumer decides an expensive wine is good because of the price, rather than tasting ability; then a wine at a cheap price will be seen as tasting cheap. Or does it?
I can assure readers many in the retail trade, not only the wine trade, are well aware that the retail price of an item is often seen as a stronger sign of quality than the perceived or hard to measure quality of the item. In many cases the customer will assume that at the high price the actual physical quality goes without saying.
Alas in the wine business it is a very difficult field and I ask customers to tread warily.
And so the life-long battle goes on between the buyer and the seller.
Welcome to Glug where we have taken out much of the price worry as all of our wines are cheap when measured against the market average.
We hope there is a need for our service and time will tell us if there is.
I will leave you with an example. The most under-priced and unloved wine on the Glug list is the Harem Rosita, a profoundly original expression of rose or wine for that matter. Why not try a bottle, understand the genius and then contemplate how hard it is to match wines with prices. Perhaps it will sell better at twice the price.