The price gap is supply and demand, for certain prestigious brands.
So first of all, wine comes from grapes; and grape quality is dependent on many factors. Weather of course, but also soil, water, light, heat, and grower skill/decisions. AND of course, the actual grape vine.
Old vines produce less fruit – thus, smaller production, BUT generally more concentrated and intense. Younger vines produce more fruit, but you have to prune them – the amount of pruning affects the concentration and quality of the juice you get. If your options are ‘n’ cases of wine at $60/case (wholesale) or ‘n/3’ cases at $120, you’re probably going to prune sparingly to get as much juice and wine as possible, without creating garbage. On the other hand, if you can make truly great wine and have a name for yourself, then the options are ‘n/3’ cases at $1000, or ‘n’ cases at $1000 – for a year or two, and then the price per case drops down to $100 because nobody trusts you anymore.
Then you factor in the slope of your land and composition of the soil (acidity, water retention or runoff), the light, the use of pesticides, mulch, etc..
So now you have some amount of good-quality grapes. How do you make wine? Do you make wine that’s going to mature over 10-50 years, or wine that’s going to be drinkable about the time it hits the market, late next year (like about 90% of the wine sold)? The former leads to more expensive wine, and is harder to sell – BUT if done well, can establish you over time as a top-notch winemaker. Or drive you into bankruptcy even sooner.
So this pretty much determines the pricing for most wines between $8 and $80. Above that, things get…complicated.
If you’re in Bordeaux for instance, your vinyard is likely ranked by the government. Your wine has to meet certain standards of quality and composition, and much of it is historical. There are, for instance, only five first-growth houses, and only one of them was not defined as such in 1855. (Chateau Mouton-Rothschild, which got promoted in 1973). If you’re one off those, or one of a limited few others who have a similar cachet, you can pretty much name your price. The thing is, most of their wine is sold on futures at auction, so basically it’s “as much as someone is willing to pay.”
Related Viewing: The Greatest Wine Forger- Rudy Kurniawan