It’s not fake in the sense that nobody can discern between different wines, but the gap between cheap and expensive wines is less real than the difference between cheap and expensive cars or houses. You can also find or train people to identify hundreds of different brands of mineral water, some expensive. But the expensive ones are not objectively better. If they were, they would be chemically isolated and mass produced.
There are a number of factors that impact the price of different wines. Supply and demand are definitely present, and mixed into that is conspicuous consumption, and that is separate from the wine, itself.
What real estate costs a vineyard faces factors in. (If someone still has an outstanding commercial mortgage on their vineyard in Napa, that is going to increase the price of the wine produced).
Some things do improve quality, or at least are discernable in the taste of a given wine, that also do increase cost. Two examples would be how densely planted a given vineyard is (the vintner has to weigh a higher yield versus allowing fewer vines to pull more nutrients from the soil), and how long a wine is aged before it is bottled (many wines are made from Sangiovese, but Brunello di Montalcino is aged for a minimum of two years in oak and a minimum of four years in total, and that four-to-five year lag to market impacts a producer’s bottom line). And those aforementioned oak barrels add cost, particularly if aged in new oak (versus aging in just stainless steel, concrete, etc.).
In your economics 101 textbook, certainly. But this is a significant part of why, absent import costs, European wines are cheaper than American wines at the bottom end of the price scale.
At the upper end it’s to do more with demand, so American wine growing regions have to develop an international reputation. Napa has, and places like Willamette are on their way.
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Notes -
It’s not fake in the sense that nobody can discern between different wines, but the gap between cheap and expensive wines is less real than the difference between cheap and expensive cars or houses. You can also find or train people to identify hundreds of different brands of mineral water, some expensive. But the expensive ones are not objectively better. If they were, they would be chemically isolated and mass produced.
There are a number of factors that impact the price of different wines. Supply and demand are definitely present, and mixed into that is conspicuous consumption, and that is separate from the wine, itself.
What real estate costs a vineyard faces factors in. (If someone still has an outstanding commercial mortgage on their vineyard in Napa, that is going to increase the price of the wine produced).
Some things do improve quality, or at least are discernable in the taste of a given wine, that also do increase cost. Two examples would be how densely planted a given vineyard is (the vintner has to weigh a higher yield versus allowing fewer vines to pull more nutrients from the soil), and how long a wine is aged before it is bottled (many wines are made from Sangiovese, but Brunello di Montalcino is aged for a minimum of two years in oak and a minimum of four years in total, and that four-to-five year lag to market impacts a producer’s bottom line). And those aforementioned oak barrels add cost, particularly if aged in new oak (versus aging in just stainless steel, concrete, etc.).
Fixed costs don't change prices for profit maximizing businesses.
If they could make more profit charging more (or less), they'd charge more (or less).
In your economics 101 textbook, certainly. But this is a significant part of why, absent import costs, European wines are cheaper than American wines at the bottom end of the price scale.
At the upper end it’s to do more with demand, so American wine growing regions have to develop an international reputation. Napa has, and places like Willamette are on their way.
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