Oligarchs and Irony

In case you hadn’t already heard, the latest release of the Burgundian Demi-God, Domaine de la Romanée-Conti (Romanée-Conti) 2005 (aka DRC) – by all accounts a pretty decent year – is now available at the bargain basement price of US$15,000 per bottle (yes, that’s right – US$15,000 per bottle!).

In the Land of Oz that many clams will currently buy you approximately: 744 bottles of decent quaffing wine; 375 cases of beer; 9,375 litres of petrol; one medium sized car; or a down payment on a small house. Remember we are talking about a single bottle of wine here…

So, where does this price come from? How can a 750ml bottle of fermented grape juice possibly be worth so much?

Supply and Demand

DRC (particularly the stuff from the definitive Romanée-Conti vineyard – there are other equally famous vineyards under the DRC umbrella, eg La Tâche) has only ever been made in relatively small quantities, with supply being restricted accordingly. On top of that, the demand for DRC, along with a number of other fine/expensive wines, has gone through the roof in the last couple of years - taking prices along for the ride with it.

But, where’s this demand coming from? Isn’t the US in a recession, with Europe not far behind?

The new SuperRich

The answer, interestingly enough, lies somewhere in between. The cashed up economies of China, India, the Middle East and Russia are currently running white-hot and are producing a disproportionate number of millionaires and billionaires at a phenomenal rate; and these business Oligarchs have an unquenchable thirst for luxury consumer goods. Brands like Louis Vuitton, Chanel, Dior etc are being snapped up by the thousands. I guess when you’ve got more money than you can spend then only the best will do.

And of course that philosophy applies to the purchase of wine as well. If you’ve got a Villa in Tuscany, a Ferrari in the garage and a yacht at Monte Carlo, then you most certainly must have a few cases of DRC in the cellar.

The problem is, given all of these millionaires, there’s quite simply not enough wine to go around. Couple that with a bit of opportunistic pricing from the folks in Burgundy - taking advantage of some very deep pockets - and you end up with really, really, really expensive wine.

Is it worth it?

Now I’ve got to admit, I’ve not yet had the pleasure of tasting a DRC or any of its contemporaries, but I can state with some certainty that regardless of how good it actually is, it ain’t worth US$15,000 a bottle.

In fact, there are plenty of wines, at a fraction of the price, that I suspect would come extremely close, if not match, the quality of a DRC.

So why buy this wine if it’s so ludicrously overpriced? What’s the point? What extra value do you get?

Not just a wine

Well…when you buy a DRC you’re not just buying a superior wine, you’re buying exclusivity. This wine is a statement. It’s a monument to financial success as much as anything. It gives you special bragging rights over your contemporaries and a smug satisfaction at dinner parties when guests silently realise…“Holy Crap!! Vladimir’s doing well”.

And I suspect that is absolutely ok with the majority of buyers - in fact I’m sure that’s exactly what they’re looking for. My guess is that most don’t really care about the actual quality of the wine at all*. It is the perceived quality that matters – and in certain circles that matters a lot.

And therein lies a pretty irony: that arguably the best tasting wines in the world are being consumed by people that really don’t care.

Strangely enough that makes me smile…I love the way the world works.

(nb* it is widely rumoured that DRC is frequently mixed with Coca-Cola in China to meet the local taste).

MW