Prices for the finest wines have exploded in recent years and there has been much talk about this. There is certainly little joy in witnessing the 'en primeur' price for Château Lafite increase by some 450% from 2008 to 2009 and when Messrs Rothschild see fit to add another 50% for the 2010, it becomes only too clear that wines like these are now only destined for investment funds and millionaires. First growths from 2010 are just about 10 times as expensive as they were from 2004 at the same stage. Sounds like a boom? Perhaps, but humbler Bordeaux is still not that easy to sell (Hugh Johnson's Pocket Wine Book 2012, p. 84).

In Burgundy things seem almost equally gloomy, at least when you look at the wines from the Domaine de la Romanée-Conti. Recently I received an offer of DRC wines from a highly reputed London wine merchant and even the slightly less lofty offerings like Echézeaux 2008 and Grands-Echézeaux 2007 carried price tags of approximately € 750 per bottle. Are they really that much better than the 2008 Echézeaux from Grivot or Jayer-Gilles or the Grands-Echézeaux 2007 from Drouhin which I all bought for less than € 100 a bottle? Burghound and others do not seem to think so and it is clear that snob-appeal comes into play here. For those who are interested: you can also snap up 6 magnums of La Tâche 1971 for the trifling sum of £ 120,000 - in bond of course. The good news is that whilst most top producers in Burgundy do increase their prices every year, they do not seem to ride the tide of demand and supply as aggressively as the first growths in Bordeaux do. 

I will not speculate as to whether the current prices for top wines are sustainable and perhaps we should take solace in the thought that there is more good and affordable wine around than ever before. It is perhaps useful however to put the current economics of wine in a historic context and in this article I will endeavour to do just that.

It is nothing new that the rich and the powerful are after the best wines for their cellars and tables and that they are willing to fork out substantial sums of money to acquire them. In 1783 Louis XVI's cellar included more than 1,000 bottles of Burgundy from 1774, the year of his coronation, including Clos de Vougeot, Romanée Saint-Vivant and Chambertin (Jasper Morris MW, Inside Burgundy, p. 26). No Romanée-Conti, you ask? No, because in 1760 the Prince de Conti acquired the Romanée vineyard for the astronomical sum of 92,400 livres or 2,310 livres per ouvrée (10 times the going rate for a top vineyard in Burgundy at the time) and reserved the entire production for the use of his lavish household until his death in 1776 (Allen Meadows, The Pearl of the Côte, p. 264-265). Is this the ultimate snobbery? Well, in any case the prince was not above claiming that he had been sold short by some 2.5 ouvrées and his compensation entails that a small part of La Romanée-Conti is actually in Les Richebourgs to this very day.

When La Romanée-Conti was put up for sale as a bien national in 1791, the auction documents noted that by 1733 its wines sold for five or six times the next most expensive wine in Burgundy (Meadows, o.c., p. 264). In 1794 the vineyard was sold for 112,000 livres, a heady price in those difficult times, and almost five times what had been paid per ouvrée in 1791 for Clos de Vougeot or Romanée Saint-Vivant (Morris, o.c., p. 26). La Tâche was sold in 1794 for 27,200 livres.

In the 19th century the situation seems to have remained very much the same. Cyrus Redding, A History and Description of Modern Wines, p. 125, notes in 1860 that the common red wines from Meursault sell for 90-100 francs the queue (456 litres), whereas the wines from Beaune, Volnay, Corton, Nuits and Vosne all cost around 400-500 francs. La Tâche and Richebourg commanded a relatively small premium at 600 francs, but Romanée-Conti was six or seven francs a bottle (some 3,600 - 4,200 francs the queue) and Clos de Vougeot, whose reputation seems to have soared by that time, came in at five or six francs a bottle (3,000 - 3,600 francs the queue).

Redding (o.c., p. 124) also notes that prices could increase very strongly over a short period of time, when he writes about white Burgundy and about Puligny in particular: "The prices of the wines of the Côte d'Or differ greatly and cannot be fixed. (...) The Mont-Rachet brings twelve hundred francs; the other white wines from three to six hundred; and the common sort from fifty to seventy the queue. It often happens in superior years that the best wines, after making, do not bear a higher price than four hundred francs and yet in fifteen months twelve or fifteen hundred are commanded for them." Even 150 years ago, price hikes of more than 300% within a year were apparently not unheard of!

By the 1860's, claret had become very expensive too. Michael Broadbent, The Great Vintage Wine Book 1980, mentions that in 1868 there were some good wines, but the prices were incredibly high, in particular for Lafite and Margaux, and considers that these probably were a reflection of the enormous price Baron James de Rothschild paid in that year for the Lafite vineyards (p. 38 in the Dutch edition). Broadbent writes (o.c., p. 33-34, translated back from the Dutch translation so the wording may not be identical to the English original): English, Scottish and Irish merchants played an important part in the development of the Bordeaux trade and Gladstone's tax cuts in the 1860's created a period of unprecedented prosperity. It is no coincidence that prosperity and good quality go hand in hand: when there are enthusiasts who can afford to drink fine wine, fine wine will be made. Unfortunately these periods are always followed by excessive prices, overproduction and followed by recession." It seems that with wine too, what goes up must come down. 

Redding seems to confirm that claret was not cheap around 1860 when he quotes the first growths at around 2,300 francs the tun (912 litres, equal to 2 queues), the second growths at 2,000, the third at 1,500 to 1,800 and the fourth at 1,200 to 1,400 (o.c., p.128). This also shows that the first growths at that time were not in as distinctly separate a price category as they are today. Sauternes, still so woefully undervalued today, was very expensive 150 years ago: at ten years old it could command 2,000 francs and sometimes 3,000 to 4,000 or even 6,000 francs per tun. (Redding o.c., p. 172 - is the latter number perhaps a reference to the great d'Yquem 1847 that was reputedly bought by the Russian Tsar for an astronomic sum?).

Broadbent's assessment of prices in the 1860's and 1870's is confirmed by George Saintsbury's 1920 Notes on a Cellar-Book (reprinted UCP, 2008), who writes (p. 80-81): "And as for the price, taking the same growths at the same age of (1) the good vintages of the seventies, (2) the '93's, (3) the '99's and '00's, I should say that there was a drop of at least twenty-five per cent. between the first two, and a further drop of more than the same extent between (2) and (3). Even now, when all wine is at abnormal and preposterous prices, I see hardly anything, in the better classes of claret, quoted at figures parallel even to those which obtained thirty years ago."

Berry Bros' 1909 Wine List also seems to confirm this when it quotes Château Lafite 1869 at 200 shillings per dozen, the 1878 at 180 shillings and the 1899 at 72 shillings. Interestingly, Romanée Conti (at 150 - 200 shillings per dozen) seems to have temporarily lost its historically immense margin by that time, not only to Clos de Vougeot (at up to 150 shilings for the 1887) but also to Chambertin at up to 160 shillings for the 1886 Very Fine. Please note however that all these were topped by Pommery 1892 at 210 shillings and Veuve Clicquot 1892 at 240 shillings. And what about Schloss Johannisberg Cabinet at 144 - 200 shillings per dozen - as expensive as Lafite or Romanée-Conti. That would take some getting used to today!

From the Great War until the 1950's a happy time followed for wine drinkers in England. Broadbent writes (p. 35): "The English were spoilt. (...) Between both World Wars in the 20th century America was in the grip of prohibition, Europe was suffering from a depression and the Far East did not count, insofar as wine was concerned. From the early 1950's, when I joined the wine trade, to the 1960's claret was abundant and affordable. British doctors, lawyers and the established middle classes enjoyed their English bottled classed growths daily and could easily afford a first growth for dinner. Since the mid-1960's a more affluent world became interested in wine; some people considered wine a commodity and later on even as a means against inflation. The increasing cost of production, land and labour and the ever increasing demand of drinkers and investors have made prices run riot." 

The decade of the 1970's was a bumpy ride for Bordeaux. Initially it was the excessive pricing of the very average 1972 vintage that broke the camel's back. The market had been feverish and excessive demand from traders and investors had sent prices through the roof. When speculators saw no further upward potential they withdrew from the market, the oil crisis came, property prices plummeted and the banking system nearly collapsed. All of a sudden large stocks of wine were unmarketable and had to be discounted heavily. It was a crisis. A few years later the market was still cautious and the prices for the 1976's (after the very expensive 1975's) remained reasonable - but still at a level that made wines from the 1960's seem ridiculously cheap and those from the 1950's coming from a different world. (Broadbent, o.c., p. 181). The 1977's (a mediocre vintage) however were again up by 70%.

As I mentioned before, wine prices in Burgundy do not follow the economic tide as closely as the top wines in Bordeaux do. In The Wines of Burgundy (UCP 2008), Clive Coates MW provides tables of movements of ex-cellar prices of four top domaines in Burgundy (Chandon de Briailles, René Engel, Henri Gouges and Armand Rousseau) from the late 1960's to 2004 and they show a clear pattern of gradual increase without significant peaks or troughs (Appendix 6, p. 843-848). The secondary market for cult wines from Burgundy is obviously a totally different affair and Rousseau's Chambertin 2009 is now more than six times as expensive as it was on release. Prices at the annual wine auction of the Hospices de Beaune do show a lot of variation, but the pattern is not very clear. In his book about the Hospices (éditions Féret 2009, translated by Delia Dent), Laurent Gotti provides an overview of the auction results since 1950. Most instructive is the development of the average price per barrel expressed as a multiple of the minimum wage in France per hour. Perhaps surprisingly this multiple has been very stable since 1980, oscillating in a range from 550 to 1,100 with only a few exceptions. If the minimum wage may be taken as a measure of inflation, one might say that in real terms prices for Hospices de Beaune wines have not increased for thirty years. The highest ratio ever (2,555.40) was reached in 1972, the same vintage that heralded the crash of the market for Bordeaux.

For Bordeaux 1982 was a watershed vintage in many ways. It was the vintage that made Robert Parker's reputation and in a way it was the vintage that marked the start of the modern world market for fine wine and for claret in particular. People older than me still talk about paying € 50 en primeur for Mouton 1982 or Pétrus 1982 and even I managed to pick up Cheval Blanc 1983 and Mouton 1983 for around € 65 at retail some 25 years ago (1 bottle each - a considerable outlay for a 17 year-old in grammar school). Bordeaux prices have seen ups and downs since the early 1980's but on the whole they have been increasing steadily and sometimes steeply. I guess this takes us back to the modern day which I talked about in the beginning of this article. Are we reliving the 1870's or perhaps the 1970's? As indicated before, I will not speculate but the current volatility of prices of the finest wines seems considerable. I hope the above shows that this is by no means an exceptional situation and also that there will always be those who, to quote Winston Churchill, will easily be satisfied by the very best.

Xavier Auerbach