But the issue is not simply that prices in general have gone up. The prices of top wines have risen at a far steeper rate than the prices of many other luxury goods. La Tâche 2017 is almost 18 times as expensive as the 1990, while a basic Hermès Birkin 30 bag, the grand cru of handbags, has gone from about $3,000 in 1990 to $11,000 in 2020, not quite four times as much.
Bordeaux operates on a slightly different scale than Burgundy. Far more wine is produced. But it, too, has its benchmark wines, and like Burgundy, their prices have skyrocketed.
Orley Ashenfelter, an economics professor at Princeton University, has closely tracked the Bordeaux market for years. In 1980, the price of a first-growth Bordeaux was roughly four times the price of a fifth-growth Bordeaux, he said in a phone interview, referring to an 1855 classification that ranked top Médoc producers in five tiers, or growths. Nowadays, he said, as prices have risen for all these top wines, the ratio between first- and fifth-growth price is more like 10 to 1.
What accounts for these disparities?
Partly it’s the good old law of supply and demand. Great wine is tied to finite pieces of land and to the rhythms of agriculture. With a limited quantity of grapes and only one opportunity to make wine each year, production cannot be increased to meet rising demand.
With the exception of certain top Champagnes like Dom Pérignon, which are not linked to particular vineyards, the best wines are not luxury goods like watches or handbags in which production can grow to meet demand. Nor can production be kept artificially low, for that matter, to create demand.
Yet even for a trophy wine like Dom Pérignon, the relative price has gone up. A study published in 2017 in The Journal of Wine Economics analyzed Champagne prices in New York City from 1948 to 2013 by determining how many hours people in various income groups would have to work to pay for an entry-level Champagne, a midrange bottle and a flagship or luxury cuvée like Dom Pérignon.
The study found that the entry-level bottles across income groups required fewer work hours in 2013 than in 1948, but the hours necessary to buy luxury bottles had increased. What’s more, the study found that the work hours required for a top Champagne increased at a much higher rate for the lower income groups relative to the highest, meaning that their access had diminished.