Simon Staples of Berry Bros & Rudd, a patrician wine shop in London, has an estimate in today’s NYT on the actual cost to make a bottle of Lafite, which sells for about $500 retail (find this wine). To the tape:
Mr. Staples pointed to the example of Château-Lafite Rothschild, a first-growth Bordeaux, which soared from £675, or $955, for a 12-bottle case in the 2002 futures to £4,000 a case for 2005 — which he called “the best vintage I’ve ever tasted.” But despite merely average years subsequently, the price only fell back to £3,500 in 2006 and £2,800 in 2007. He estimated it cost the château €10, or $13, to make a bottle of the wine.
Wow, talk about return on investment! I actually get asked the question a lot about whether a winery’s costs are really reflected in a higher priced bottle. Certainly, there are expensive ways to make wine and there are inexpensive ways to make wine.
But according to a fascinating exposé in the Revue de Vin de France, even the expensive way to make wine is wildly profitable. Consider some of their examples: the cost of Petrus is 30 euros and it retails for 4,500€; Dom Perignon costs 22.80 to make and retails for 129€; a generic Bordeaux wine might cost 1.38 euros to make and retail at a supermarket for 1.86€.
“Le veritable prix des grandes bouteilles” Revue de vin de France, February 2009.
“Bordeaux futures, wine investment, waste, insurance – sipped and spit“