re-visiting an old friend (topic)

[jgould]

NYT 6 Oct 2005 International column re: "How many miles to a gallon (of wine)?

funny, but true.

the perennial question:

IF THERE IS SO MUCH FRENCH WINE, WHY DO THE PRICES CONTINUE TO GO UP IN WINE STORES & RESTAURANTS IN MANHATTAN, & ASSUME EVERYWHERE ELSE??

note: prefer responses that do not include ridiculous justifications; & well aware of fuel costs, transportation, rent, insurance. tis true, all have gone up, BUT THE FACT REMAINS THAT THESE HAVE BEEN BUILT IN BY THE TIME WINE REACHES OUR TABLE; THEREFORE, WITH WINE PRICES DOWN, THESE COSTS SHOULD BE SOMEWHAT OFFSET; THEREFORE, PRICES (IN GENERAL) SHOULD REMAIN STATUS QUO!!

as well as the FACT: before the above increases, wine prices were marked up beyond reason. so much for the wine industry's outward support for attempting to popularize wine drinking across the country...

Edited October 6, 2005 by jgould (log)

[Brad Ballinger]

You forgot to mention the strength of the euro v. the dollar, but I assume that is part of the "ridiculous justification" list nonetheless.

Therefore, I'm left with one simple, yet glaringly obvious, response: Because it is what the market will bear. Now, why the market continues to bear increases in wine prices is a subject of much conjecture. But for the people selling it, they are much more focused on what the market will bear. Ask them why, and many will likely reply, "Does it matter?"

Now some markets bear the high prices more than others. I just read yesterday on a forum at West Coast Wine Network that Brown Derby is selling its stock of 2000 Beringer Private Reserve Cabernet Sauvignon for $40/bottle. But I don't see anything like that on the Brown Derby web site. Anyway, if it is true, that's one data point about a market downturn.

Who is the supreme guilty party? No idea. If I'm a retailer, though, and I want to stock a certain wine (because I know my customers will buy it), I'm probably going to pay what the wholesaler is charging me because I want to be able to continue receiving the wine well into the future. If I'm the wholesaler or importer, I want to keep the wine in my portfolio so I don't lose it to anyone else, and I may have to swallow hard and pay what the producer is asking. If I'm the producer (and I'm not also the grower), I may have to pay what the farmer is asking if I want to continue to receive the same grapes every year.

But it is still a "market will bear" situation. Until someone in the chain (with most eyes looking toward the consumer) stands up and says, "No more," I don't see the trend reversing. Do you?

Ultimately, the consumer usually gets his or her way. Right now, enough still are without the supply chain having to lower prices.

[jgould]

You forgot to mention the strength of the euro v. the dollar, but I assume that is part of the "ridiculous justification" list nonetheless.

Therefore, I'm left with one simple, yet glaringly obvious, response: Because it is what the market will bear.  Now, why the market continues to bear increases in wine prices is a subject of much conjecture.  But for the people selling it, they are much more focused on what the market will bear.  Ask them why, and many will likely reply, "Does it matter?"

Now some markets bear the high prices more than others.  I just read yesterday on a forum at West Coast Wine Network that Brown Derby is selling its stock of 2000 Beringer Private Reserve Cabernet Sauvignon for $40/bottle.  But I don't see anything like that on the Brown Derby web site.  Anyway, if it is true, that's one data point about a market downturn.

Who is the supreme guilty party?  No idea.  If I'm a retailer, though, and I want to stock a certain wine (because I know my customers will buy it), I'm probably going to pay what the wholesaler is charging me because I want to be able to continue receiving the wine well into the future.  If I'm the wholesaler or importer, I want to keep the wine in my portfolio so I don't lose it to anyone else, and I may have to swallow hard and pay what the producer is asking.  If I'm the producer (and I'm not also the grower), I may have to pay what the farmer is asking if I want to continue to receive the same grapes every year.

But it is still a "market will bear" situation.  Until someone in the chain (with most eyes looking toward the consumer) stands up and says, "No more," I don't see the trend reversing.  Do you?

Ultimately, the consumer usually gets his or her way.  Right now, enough still are without the supply chain having to lower prices.

←

thanks for nitpicking, but i guess that goes with the territory , & yes, for the sake of brevity, i did not include the relative strength of the €/$. nonetheless, the emphasis should be on the absolute % increases which do NOT match wine's persistent % increases at the wholesale, retail/consumer, & restaurant level.

i could not agree more with your "cut to the chase" & well-stated comment: "market will bear". & yes, my point EXACTLY, until... the consumer stands up... & says no more..."

i also do not see the trend reversing.

i don't know if it is me, or a relatively small (intelligent ) group that recognizes the ridiculous mark-ups, & will never understand why consumers continue to pay the offered price. its so odd (to me) consumers will go out-of-their-way to save on cereal, will spend more time analyzing a tv set purchase - vs. - analyzing a stock before buying; but will happily pay $30 for a $7 muscadet, etc, etc,........ this is behaviorial science at its best, & currently being studied ad infinitum.

on the other hand, well, maybe not on the other hand, the same consumer happily pays $5 in a bar for a $.50 bud, $6 for a $1.10 heineken, etc, etc...., or $8 for a $1 gin & tonic. which leads to maybe 1 of the best marketing observations in history:

to paraphase: "no one ever went poor, underestimating the stupidity of the consumer", which is a sad, but true fact & also sadly describes most of the U.S.!

Edited October 7, 2005 by jgould (log)

[Brad Ballinger]

on the other hand, well, maybe not on the other hand, the same consumer happily pays $5 in a bar for a $.50 bud, $6 for a $1.10 heineken, etc, etc...., or $8 for a $1 gin & tonic.

←

It's often been said that in any economy, there is always money to be made on liquor. The statement usually includes the words "and porn," but this is a food and beverage site.

[jsolomon]

I don't think the word "porn" is as gauche as you would think...

Food porn thread started by Jason Perlow.

[jgould]

sooooooo,

when does the consumer stand up - vs. - the concept of "what the market will bear" restaurant policies

[Brad Ballinger]

Well, since the consumer is representing the market in that instance, I imagine the consumer steps up when she or he decides not to purchase the wine, or to pick a restaurant with more attractively priced wines, or to stay at home.

[jgould]

Well, since the consumer is representing the market in that instance, I imagine the consumer steps up when she or he decides not to purchase the wine, or to pick a restaurant with more attractively priced wines, or to stay at home.

←

stay home sounds like the best option, AFTER visiting local wine merchant.

the "consumer" just doesn't have the "brains", nor the discipline to stand up to the heavy handedness of the restaurant industry.

the good news is better food, better wine, better service, no boorish loud group at the next table, no arrogant maitre'd's, no crappy overpriced wines-by-the glass served too hot or too cold, no table by the kitchen or bathroom or serving areas.

gee, on second thought, this option is much better than continuing the ridiculous practice of all of us sheep.

[JohnL]

NYT 6 Oct 2005 International column re: "How many miles to a gallon (of wine)?

funny, but true.

the perennial question:

IF THERE IS SO MUCH FRENCH WINE, WHY DO THE PRICES CONTINUE TO GO UP IN WINE STORES & RESTAURANTS IN MANHATTAN, & ASSUME EVERYWHERE ELSE??

note: prefer responses that do not include ridiculous justifications; & well aware of fuel costs, transportation, rent, insurance. tis true, all have gone up, BUT THE FACT REMAINS THAT THESE HAVE BEEN BUILT IN BY THE TIME WINE REACHES OUR TABLE; THEREFORE, WITH WINE PRICES DOWN, THESE COSTS SHOULD BE SOMEWHAT OFFSET; THEREFORE, PRICES (IN GENERAL) SHOULD REMAIN STATUS QUO!!

as well as the FACT: before the above increases, wine prices were marked up beyond reason. so much for the wine industry's outward support for attempting to popularize wine drinking across the country... 

←

You might want to take a look at a recent thread: "Police Teargas Burgundian Winemakers" in this forum. There are some links to great information on the current state of affairs.

The glut of French wine is at the lower levels of the classification system. There is an ocean of Vin s de Pays and Vins de Table. There are many reasons. The French themselves are drinking less wine (strict drunk driving laws have been recently enacted) and there is increased competition from other wine making countries. These "lower level" wines also have difficulty competing with similarly priced wines from the New World--the EU has told France that they must reduce the quantity of these wines and increase the quality so as to better compete in the world market.

Most of these wines are not even sold here in the US.

Higher ranked French wines-classified growth Bordeaux and Burgundy for eg., has been performing much better in the world market. Prices for higher quality wines are affected by supply and demand. Currently there is still plenty of demand for these wines from not just the US but the rest of the wine buying world.

markups via the three tiered system of seeling wine in this country don't help things here.

Competition from wines produced in Spain, South America and Australia and New Zealand has an impact on wine prices as well. (I suspect that many large producers of California Cabernet and Chardonnay are now changing their marketing strategies--It is not for nothing that suddenly there is an emergence of Syrah as a key player in California.)

In the end--we should see a grater variety of wines here in the US--both foreign and domestic produced. The quality of the lower end wines will rise and the prices of high demand wines --be it first growth Bordeaux or Cal cult wines will continue to rise.

[jgould]

NYT 6 Oct 2005 International column re: "How many miles to a gallon (of wine)?

funny, but true.

the perennial question:

IF THERE IS SO MUCH FRENCH WINE, WHY DO THE PRICES CONTINUE TO GO UP IN WINE STORES & RESTAURANTS IN MANHATTAN, & ASSUME EVERYWHERE ELSE??

note: prefer responses that do not include ridiculous justifications; & well aware of fuel costs, transportation, rent, insurance. tis true, all have gone up, BUT THE FACT REMAINS THAT THESE HAVE BEEN BUILT IN BY THE TIME WINE REACHES OUR TABLE; THEREFORE, WITH WINE PRICES DOWN, THESE COSTS SHOULD BE SOMEWHAT OFFSET; THEREFORE, PRICES (IN GENERAL) SHOULD REMAIN STATUS QUO!!

as well as the FACT: before the above increases, wine prices were marked up beyond reason. so much for the wine industry's outward support for attempting to popularize wine drinking across the country... 

←

You might want to take a look at a recent thread: "Police Teargas Burgundian Winemakers" in this forum. There are some links to great information on the current state of affairs.

The glut of French wine is at the lower levels of the classification system. There is an ocean of Vin s de Pays and Vins de Table. There are many reasons. The French themselves are drinking less wine (strict drunk driving laws have been recently enacted) and there is increased competition from other wine making countries. These "lower level" wines also have difficulty competing with similarly priced wines from the New World--the EU has told France that they must reduce the quantity of these wines and increase the quality so as to better compete in the world market.

Most of these wines are not even sold here in the US.

Higher ranked French wines-classified growth Bordeaux and Burgundy for eg., has been performing much better in the world market. Prices for higher quality wines are affected by supply and demand. Currently there is still plenty of demand for these wines from not just the US but the rest of the wine buying world.

markups via the three tiered system of seeling wine in this country don't help things here.

Competition from wines produced in Spain, South America and Australia and New Zealand has an impact on wine prices as well. (I suspect that many large producers of California Cabernet and Chardonnay are now changing their marketing strategies--It is not for nothing that suddenly there is an emergence of Syrah as a key player in California.)

In the end--we should see a grater variety of wines here in the US--both foreign and domestic produced. The quality of the lower end wines will rise and the prices of high demand wines --be it first growth Bordeaux or Cal cult wines will continue to rise.

←

thx for a wonderful response; however, my quibble/debate/arguement is with the prices of wines from the prospective of obscene retail/restaurant mark-ups in light of the "glut".

i do beg to differ with 1 aspect which is the "glut". the demand for the very upper tier is a manufactured demand from those with money to impress but no real appreciation. so be it, that's reality.

there have been far too many articles on actual gluts in the mid-to-upper ranges, not just the low end 'plonk'. for some reason the consumer is impervious & continues to overpay.

quite frankly, the only area of limited supplies are in burgundy & based on a number of exposés, it is becoming increasingly difficult to know when u are getting what u believe is in the bottle.

[JohnL]

I think the price of wine (at least here in the US) is not a result of "obscene" markups. Rather, the three tiered system we have adds some layers of markup.

I doubt there is any "gouging" on the part of retailers--there is not a lot of money in retail.

As for restaurants, some do mark wine up stiffly, I am finding quite a few places thaty are quite reasonable though--this has to be looked at on a case by case basis.

The demand for the "upper tier" of wine is not necc the result of those rich folks who "want to impress." True there are some who fall into this category but for the most part--people buying these wines (first growth Bordeaux, Burgundy, Cal cult wines etc) do, in reality, appreciate these wines.

Some of these people are wealthy and many are not. (They just spend a large portion of what disposable income they have on their passion for wine).

I have always been a bit "bothered" by the "conventional wisdom" that attributes sales of fine wines to people who are wealthy and have no appreciation for these wines. This amounts to a bit of "sour grapes."

Is there a wine appreciation test one must pass to determine their worthiness to purchase a bottle of Lafitte?

I think your complaint about prices does have some merit, there are restaurants that mark things up too highly and some wines are quite costly. I do not think this is epidemic in nature. Already, we are seeing a moderation in prices of those wines that are vulnerable to competition and we are seeing other wines that are in great demand garner higher and higher prices.

Several poor vintages will impact pricing far more substantially than any human intervention.

I believe that in most cases, the cost of the wine in question is most easily attributable to supply and demand.

[jgould]

I think the price of wine (at least here in the US) is not a result of "obscene" markups. Rather, the three tiered system we have adds some layers of markup.

I doubt there is any "gouging" on the part of retailers--there is not a lot of money in retail.

As for restaurants, some do mark wine up stiffly, I am finding quite a few places thaty are quite reasonable though--this has to be looked at on a case by case basis.

The demand for the "upper tier" of wine is not necc the result of those rich folks who "want to impress." True there are some who fall into this category but for the most part--people buying these wines (first growth Bordeaux, Burgundy, Cal cult wines etc) do, in reality, appreciate these wines.

Some of these people are wealthy and many are not. (They just spend a large portion of what disposable income they have on their passion for wine).

I have always been a bit "bothered" by the "conventional wisdom" that attributes sales of fine wines to people who are wealthy and have no appreciation for these wines. This amounts to a bit of "sour grapes."

Is there a wine appreciation test one must pass to determine their worthiness to purchase a bottle of Lafitte?

I think your complaint about prices does have some merit, there are restaurants that mark things up too highly and some wines are quite costly. I do not think this is epidemic in nature. Already, we are seeing a moderation in prices of those wines that are vulnerable to competition and we are seeing other wines that are in great demand garner higher and higher prices.

Several poor vintages will impact pricing far more substantially than any human intervention.

I believe that in most cases, the cost of the wine in question is most easily attributable to supply and demand.

←

when most talk of obscene prices, the reference is restaurants!!!

quite frankly, it is true our 3 tier system is biased toward increasing prices; however, the point is, AFTER the wine leaves the retailer. therefore the 3 tier system is NOT in effect at this stage; ex. an $8 beaujolais village retail already has the 3 tier built-in, so your explanation falls short when many many restaurants charge $32!!??

& your comment about finding some restaurants that are reasonable -

there are ~10,000 restaurants in nyc, so how many are u referring to?

there is an epidemic spurred on by those who makes excuses, by those who don't mind 4x mark-ups, & by those who support the greedy restauranteurs.

poor vintages do NOT have any effect. 99.9% of the population couldn't tell a 1982 bordeaux from a 1984, or a 2000 from an 2002. ONLY HUMAN INTERVENTION WILL IMPACT PRICING!.

SUPPLY, DEMAND - unfortunately & sadly, only works in theory or in the classroom. in the wine world, this is not appropo as witnessed by huge supply NOT affecting prices, regardless of quality.

& yes, i totally agree with your "tongue-in-cheek?" recommendation - there should be a "wine appreciation" course one should be required to take AND pass

Edited October 12, 2005 by jgould (log)

[JohnL]

I think the price of wine (at least here in the US) is not a result of "obscene" markups. Rather, the three tiered system we have adds some layers of markup.

I doubt there is any "gouging" on the part of retailers--there is not a lot of money in retail.

As for restaurants, some do mark wine up stiffly, I am finding quite a few places thaty are quite reasonable though--this has to be looked at on a case by case basis.

The demand for the "upper tier" of wine is not necc the result of those rich folks who "want to impress." True there are some who fall into this category but for the most part--people buying these wines (first growth Bordeaux, Burgundy, Cal cult wines etc) do, in reality, appreciate these wines.

Some of these people are wealthy and many are not. (They just spend a large portion of what disposable income they have on their passion for wine).

I have always been a bit "bothered" by the "conventional wisdom" that attributes sales of fine wines to people who are wealthy and have no appreciation for these wines. This amounts to a bit of "sour grapes."

Is there a wine appreciation test one must pass to determine their worthiness to purchase a bottle of Lafitte?

I think your complaint about prices does have some merit, there are restaurants that mark things up too highly and some wines are quite costly. I do not think this is epidemic in nature. Already, we are seeing a moderation in prices of those wines that are vulnerable to competition and we are seeing other wines that are in great demand garner higher and higher prices.

Several poor vintages will impact pricing far more substantially than any human intervention.

I believe that in most cases, the cost of the wine in question is most easily attributable to supply and demand.

←

when most talk of obscene prices, the reference is restaurants!!!

quite frankly, it is true our 3 tier system is biased toward increasing prices; however, the point is, AFTER the wine leaves the retailer. therefore the 3 tier system is NOT in effect at this stage; ex. an $8 beaujolais village retail already has the 3 tier built-in, so your explanation falls short when many many restaurants charge $32!!??

& your comment about finding some restaurants that are reasonable -

there are ~10,000 restaurants in nyc, so how many are u referring to?

there is an epidemic spurred on by those who makes excuses, by those who don't mind 4x mark-ups, & by those who support the greedy restauranteurs.

poor vintages do NOT have any effect. 99.9% of the population couldn't tell a 1982 bordeaux from a 1984, or a 2000 from an 2002. ONLY HUMAN INTERVENTION WILL IMPACT PRICING!.

SUPPLY, DEMAND - unfortunately & sadly, only works in theory or in the classroom. in the wine world, this is not appropo as witnessed by huge supply NOT affecting prices, regardless of quality.

& yes, i totally agree with your "tongue-in-cheek?" recommendation - there should be a "wine appreciation" course one should be required to take AND pass

←

I think we are guilty of two things here:

1--over generalizing

2--basing opinion upon conventional wisdom

I do not share your pessimistic view of restaurant wine pricing.

Yes, many restaurants mark up wine way too much. (There is probably a thread out here on that topic alone). I would add that many do not and this list is growing.

First--are we talking about basic low end wines on a list or mid priced or high end? restaurants often mark up lower priced wines at greater multiples and higher end wines at lower multiples. Thus the "bargains" on many wine lists are found at the mid-to higher end wines.

A good restaurant will attempt to "balance" their wine list based upon who their customers are and to be profitable.

Second--There are many factors that go into the price of a wine on a restaurant list from what the restaurant paid for the wine, to time the wine spends in the cellar, to the cost of service (glassware, breakage, personnel) etc etc etc.

The good restaurant will also adjust pricing to encourage wine sales. Many times certain wines are marked down based on inventory--older wines, wines that were bought in too large quantities etc.

I just think it is unfair to take a $32 Beaujolais and declare--"Guilty of gouging."

In fact a good cru Beaujolais at that price is a good deal on a list--IMOP. On that same list one may find an Haut brion from a good vintage at $200 which may in fact, be a "better bargain" than the Beaujolais. The point is, most restaurants selling $20 Beaujolais would be guilty of bad management--potentially fatal for them for them more than gouging.

As to wine prices in general, here too, it is difficult to generalize. Are we talking about Bordeaux? Burgundy? Australian Shiraz? California wines?

Bad vintages are indeed a factor--especially in Bordeaux. Anything that leads to too much wine on retailers shelves and too little demand from consumers at any level will lead to either the retailer going out of business or lower prices.

In fact, as noted out here (see the "Teargas/Burgundy thread) the "glut" at the lower end of the wine quality ladder is, in fact, due to a drop in demand!--the French are drinking much less wine.

Conversely, at the high end, top Burgundy and Bordeaux are fetching high prices because there are more and more people who want these wines--the Japanese etc. It is true that more people are drinking (and buying) better wines these days. The lower end of the spectrum sees brutal competition for French wines (and the US and Italy) from Australia who have mastered the art of making a better quality low priced wines and marketing them to the world.

Right now, there are more options for wine drinkers at every level of interest and every price point than ever before. and more places to buy! It has only been recently that auctions of wine were open to the general public and there is the internet--these have created greater competition at retail and thus better prices and choice for consumers.

Finally, as for the "Lafitte test", this smacks of "wine snobbery."

There is some insidious conventional wisdom that a group of nouveau rich Wall Street tycoons is buying up all the "really good stuff" and guzzling it with $100 hamburgers made of kobe beef or even more insidious, those Japanese millionaires who are drinking Romanee Conti mixed with soda water and lemon.

I have heard both of these canards--and worse-- often enough.

That is the "unwashed" the amateurs, people who don't "appreciate" wine like "we" do. "We" who are worthy!

Yes, there are probably some people somewhere in the world who are chilling red wine or even drinking Lafitte with soda, and yes, somewhere there are some louts just buying pricey wines for pure status. So what!?

The same snobbery can be used against anyone over any product. From fois gras to fine automobiles, to big screen tv sets. Does one have to "appreciate" something to buy and own it.

What exactly defines "appreciation"? and worse--who determines who passes the test?

In fact, not all that long ago, it was a small group of rich upper class Brits who were controlling the prices of first class Bordeaux--to be placed in cellars to which most people had little or no access, for long term aging to be opened and drunk at affairs to which few were invited.

Those days are over! Today anyone in Brittain (or anywhere else in the world) can buy any wine and enjoy it as they please.

The point is, people wnjoy wine to different degrees. Case in point, my father in law is always joking that I waste money buying 'expensive" wines (to him anything over $10 a bottle is expensive), yet everytime I open an "expensive" bottle for dinner, he declares: :"hey this is really good!"

Does he know what the wine is? No does he care? No. Would he buy it for himself? No. Yet he "appreciates" it in his own way. Should I only serve him some cheap plonk and save the "good stuff" for myself--that way there will be more for me--and I really "appreciate" it.

Or do I share my wine with people generously, and allow them to enjoy it (or not enjoy it) in their own way?

I love fine cars and I have long ago stopped begrudging everyone I see driving a Ferrari as "someone who is just rich and probably doesn't really appreciate like I would--if I could afford it!"

--Just as I have stopped glancing over at the next table ordering the Harlan cabernet--to see if they are true connoisseurs or a bunch of unknowledgeable yahoos who can't possibly "enjoy" the wine.

Edited October 12, 2005 by JohnL (log)

[Brad Ballinger]

All right. All right.

Here's the thing. jgould has been upset about restaurant wine pricing for a while. Check his posting history in this forum to see what I mean. It's fine to be upset about it. He's asked why it continues to exist and what will cause it to stop or reverse. The answer is simple economics -- when a critical mass says no more. I don't see that happening in my lifetime, by the way.

Then we went elsewhere.

poor vintages do NOT have any effect. 99.9% of the population couldn't tell a 1982 bordeaux from a 1984, or a 2000 from an 2002. ONLY HUMAN INTERVENTION WILL IMPACT PRICING!.

Sorry, but a really bad generalization.

SUPPLY, DEMAND - unfortunately & sadly, only works in theory or in the classroom. in the wine world, this is not appropo as witnessed by huge supply NOT affecting prices, regardless of quality

.

Not, instantly. No. You have to allow real time for real demand to change.

the demand for the very upper tier is a manufactured demand from those with money to impress but no real appreciation. so be it, that's reality

.

No, that's not the reailty.

I think we are guilty of two things here:

1--over generalizing

2--basing opinion upon conventional wisdom

I do not share your pessimistic view of restaurant wine pricing.

Yes, many restaurants mark up wine way too much. (There is probably a thread out here on that topic alone). I would add that many do not and this list is growing.

Okay, JohnL: Give jgould some specific examples. Otherwise all you are doing is continuing the over-generalizing you mention above.

First--are we talking about basic low end wines on a list or mid priced or high end? restaurants often mark up lower priced wines at greater multiples and higher end wines at lower multiples. Thus the "bargains" on many wine lists are found at the mid-to higher end wines. A good restaurant will attempt to "balance" their wine list based upon who their customers are and to be profitable. Second--There are many factors that go into the price of a wine on a restaurant list from what the restaurant paid for the wine, to time the wine spends in the cellar, to the cost of service (glassware, breakage, personnel) etc etc etc. The good restaurant will also adjust pricing to encourage wine sales. Many times certain wines are marked down based on inventory--older wines, wines that were bought in too large quantities etc.

Covered terriroty here, here, here, and here, and is not the issue anyway. The issue is consumerism.

I just think it is unfair to take a $32 Beaujolais and declare--"Guilty of gouging." In fact a good cru Beaujolais at that price is a good deal on a list--IMOP. On that same list one may find an Haut brion from a good vintage at $200 which may in fact, be a "better bargain" than the Beaujolais. The point is, most restaurants selling $20 Beaujolais would be guilty of bad management--potentially fatal for them for them more than gouging.

Three things here. 1) jgould's issue was with a Beaujolais-Villages sold in a retail shop for $8, but in a restaurant for $32. His issue was not with the $32 price tag on its own, and then you turned it into cru Beaujolais. 2) The $200 Haut Brion point is irrelevant unless you are able to show us all a wine list that has a Beaujolais (any Beaujolais) priced at $32 and also has Haut Brion (any vintage) priced at $200. 3) Your $20 Beaujolais pricing being bad management fails if the restaurant is able to make more profit on volume than on margin.

Right now, there are more options for wine drinkers at every level of interest and every price point than ever before. and more places to buy! It has only been recently that auctions of wine were open to the general public and there is the internet--these have created greater competition at retail and thus better prices and choice for consumers.

The first sentence makes sense and is true. Your last sentence is a generalization unless you can back it up with specific prices, and specific examples where increased competition from auction houses and internet retailers has resulted in better prices for consumers -- and you have to factor in all costs of wine procurement, including shipping. Choice? Of course. (But for someone like jgould, who lives in NYC, not so much.) Prices? Prove it.

If the thread is to continue, let's continue it by talking about real consumer behavior affecting real change on the market, giving some specific and documented examples to back up your generalizations.

[JohnL]

As I see it, this is not about consumer behavior influencing the trade, rather it is the other way round.

Few people feel so intensely about this subject so as to affect any real change.

Fact is, Nike will get a thousand per cent mark up for its shoes and Mouton will will retail for $400 a bottle--it is supply and demand.

However,

It also seems that the number of people who will respond to diversity in a wine list is increasing. Witness the explosion in interest re; cooking shows the Food Network as well as more and more wine tastings--in store and off premise.

It is up to restaurants and the trade to "see" this and capitalize upon it.

As the global wine market changes the demand will be for high quality wines at every price point.

We are seeing more wines from more different places at all prices in the market place.

Looking at Italy, the wine makers have (and are continuing) to clean up their wine making --so we are seeing better quality chiantis, and pinot grigios (low to med priced) Barbarescos and Barolos (med to high) but we are also seeing wines from other varietals.

Nero, Primitivo etc etc etc. Most of these are low to moderately priced wines.

as the wine press and the media and restaurants and retailers "discover" these wines more and more consumers will become comfortable ordering them from a list (or buying at retail).

Will this create less mark up.

Not neccesarily.

at best it will offer more choice in low end and moderately priced wines and more competition for the traditional mainstays of retailer shelves and restaurant lists.

But as more and more people "discover" wines--restaurants will see more opportunity for profit at all price levels.

It will always remain a fact of life--that lower end wines will be marked up more than higher end wines and restaurants will "tailor" wine lists to their clientel.

That moderately priced Italian restaurant will offer primitivo and nero d' avola and better quality chianti's at prices its customers can bear.

And these types of restaurants will --if they are smart--be able to gain benefit of higher returns on their wine business--by cultivating the market.

When there is profit to be had in lower price points--the marketers will go there.

Edited October 12, 2005 by JohnL (log)

[jgould]

the key words, as an earlier post stated so eloquently: "what the market will bear!" end of story. the only strata of the various points - who could/can make a difference - is the consumer. if & when he/she wakes up, then maybe there is a chance of putting some sanity back into pricing. if they do not, the pricing will not change, regardless of how many wines at different price points flood the market. 95% of the world's wine production is average, at best, but i'm sure there will be the usual chorus proclaiming otherwise.

i was out with a friend last night who has a 5000 bottle wine cellar, & buys from all over. even he cannot understand the amazingly over-priced wine lists at restaurants.

anyway, nothing like beating a dead horse, standing alone in the forest whilst trees are falling, but no one there to hear, blah, blah, blah, yada, yada, yada.... its not worth the observations anymore. it is what it is, as per 95% of wines are average, 99.9% of consumers will willingly overpay, further creating that marginal demand that continues to maintain the justification for 3-4x retail mark-ups, i.e., "what the market will bear", a nice neat full circle.!

Edited October 18, 2005 by jgould (log)