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March 8, 2012

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Wine prices do not always equate to value

MANY factors determine the price of wine, but it is possible to find wonderful vintages offering value that approximate the world's most expensive wines. All it takes is an open mind and a willingness to avoid following the crowd. Anthony Rose raises a glass.

Famous for his rapier-sharp wit, the 19th century Irish author Oscar Wilde said that a cynic is "a person who knows the price of everything and the value of nothing." Do I hear Oscar Wilde turning in his grave? In its application to wine, the price of everything is now a simple thing to measure.

Thanks to the worldwide spread of communications, the Internet in particular, the price of wine whether in shops, restaurants or at auction, has become transparent. How much are we influenced by price when we buy? How much too by packaging that may flatter to deceive, the name of a fancy brand or a famous wine region?

My impression of the complex Chinese wine market is that decisions about buying wine have been largely determined by such factors, but they don't really tell us what the true value of the liquid in the bottle is. Ultimately, value is the price you and I as wine consumers put on a wine rather than its producer.

I raise it in my first article for Shanghai Daily because in China's booming market, I believe understanding the value of wine is the key to buying wine well. Anyone can buy on price or reputation, but buying a wine based on its value is the best way to spend your money. How to work out that true value?

Let's start with the liquid and what it costs to produce. Wine is an agricultural product made from fresh grapes. There are hundreds of different grape varieties in commercial use. A producer buying grapes from a grower pays a different rate according to whether the grape variety is premium Cabernet Sauvignon or a lesser variety such as Trebbiano.

The rate also varies with the location and how the grapes are grown.

The cost of central valley Merlot in Chile yielding 20 tons to the acre is considerably less than Merlot grown on Andean mountain slopes yielding 2 tons.

The cost of investment in the vineyard, the winery and the marketing add up to give you an idea of what each bottle costs to make.

It's still only half the value story. Stripping a wine of romance and character fails to account for the yawning gulf in price between an everyday bottle of basic Bordeaux with a supermarket label costing 50 yuan (US$8) and the stuff of dreams: Chateau Lafite 2000, for example, at 14,999 yuan. What is it that puts the Chateau Lafite on a different planet from the everyday Bordeaux to justify its extraordinary price?

History and pedigree, embellished with subtle marketing, are all part of what make Chateau Lafite an icon. Its prestigious name resonates around the globe and across centuries. The iconic status of a luxury brand puts it on a par with brands such as Ferrari, Cartier or Dior. Giving it pride of place on your wine rack confers status on its owner, whom everyone presumes went to the best schools and has impeccable taste.

Better 'value'

Just as the enduring qualities of a genuine Picasso could well be worth more to an art collector than a cheap reproduction, a bottle of Chateau Lafite may similarly be worth more to a wine lover than a cheap supermarket Bordeaux.

Demand may have blown its price out of proportion but its owner is unlikely to worry about that if he or she bought the Chateau Lafite with investment or status in mind.

Wine drinkers looking to buy wines for good everyday and special occasion drinking can find better "value" in comparable quality wines at much less than "status symbol" prices if they don't follow the crowd but know the right places in which to poke their noses. I'm talking about wines of quality and character that combine the characteristics of location and the stamp of the wine maker in subtle but effective ways; wines that can transform a simple meal into a great one or a mundane experience into a thrilling one.

Instead of a Bordeaux First Growth, you might seek out a lower level cru classé or cru bourgeois. New World Pinot Noirs can be excellent alternatives to red Burgundy, Australian Chardonnay to white Burgundy, South African and Chilean Sauvignon to Sancerre. Instead of the classic French regions, the south of France and Mediterranean regions of Italy and Greece are fertile areas of exploration. Check out Spain and Portugal and their growing list of great value wines. The list of good value alternatives and how to find them deserves a column on its own.

Between wines that sell on price and luxury brands sold on status, it's in this rapidly expanding area of quality and character that the best values are to be found.

Ask yourself "is that wine worth the asking price?" and you're halfway there. This is something that we as consumers can evaluate with increasing precision in the light of our own tastes, judgment and experience. We are becoming discerning drinkers, and the true discerning drinker is the one who knows the value of everything - and not just the price.


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