Everyone enjoys the satisfaction of a great deal! Buying wine is no different than anything else. We want the best product for the lowest price. In Ontario, a bottle of wine can sell for as little as under $10 or as much as several hundred dollars. So, why do some wines cost so much?
The production of a bottle of wine involves many steps with many vested interests along the way. Each contributor must receive a level of compensation. They must cover their costs and make a profit to make their contribution worthwhile. (It’s business after all!) Put together the sum of these costs and you arrive at the price of a bottle of wine.
Let’s look at some of the specific contributors to cost. We’ll also illustrate some of the differences between a wine with a high price point and a low price point.
Vineyard Management and Harvesting
A large-scale producer of branded bulk wine (ie: Yellow Tail) is more likely to buy grapes from grape farmers than it is to grow all of its own fruit. The large-scale producer shares the cost of growing the grapes. Which will reduce the price of the wine that is made from them. By contrast, an estate winery must take on the cost of growing its own grapes. This increases the price of the finished wine. However, the estate winery can exercise more care from the vineyard to the bottle. Thus resulting in a better quality wine. How much this is worth paying for is up to you.
A vineyard with easy access on flat land, that is trained to produce high yields of grapes, and that is harvested by a machine will be a lower contributor to cost than a vineyard that is grown on a difficult-to-access hillside, that is trained to produce low yields of grapes, and that is harvested by human labour. The wine produced from the lower-yielding vines may be more flavourful. This is due to a better concentration of flavours in the grapes. And the wine made from hand-harvested grapes may have more finesse. This is because the harvesters only selected the finest fruit. Again, how much the difference is worth paying for is up to you.
The Winemaking Process
Winemaking equipment (destemming machines, grape presses, fermentation tanks, etc…) is very expensive and sits idle for most of the year. When equipment is used to make wine more frequently, or when equipment is shared between multiple wineries, it reduces the costs of the bottles of wine it outputs. Maturing wine in oak barrels is more costly than maturing wine in steel tanks, and a new barrel is more costly than a used one. Ageing wine in the bottle before releasing it for sale ties up capital costs. This contributes to the final price as well. Therefore, wines that are released young, when they are fresh and fruity will be less expensive than wines with more integrated flavours from barrel maturation and bottle aging. Do you enjoy fresh-tasting wines? If you prefer more mature wines, how much more are you willing to pay for them?
Packaging, Retailing and Taxation
When we purchase a bottle of wine, we buy the packaging as well. We pay for the container, the closure, and the label. Thick glass or uniquely shaped bottles are more expensive than ordinary glass bottles. Tetra packs and bag-in-the-box packages are less expensive than glass bottles. However, some consumers feel they diminish the “class” associated with opening a bottle of wine. Real corks are more expensive than screwcaps. A custom-designed label from a design company will be more expensive than a label designed in-house. Are you willing to pay a little more for a flashy label and a unique-looking bottle, or is the liquid inside all that matters to you?
The wine retailer (whether it be the winery itself or the LCBO) has labour and overhead to pay for, which contribute to the purchase price of your wine. Wines sold under the VQA label (an indicator of quality) must pay a fee to the Vintners Quality Alliance. And, unfortunately, alcohol sold in Ontario is subject to a high rate of taxation by the provincial government.
Name Recognition and Prestige
Wines from regions with a positive reputation will fetch a higher price than wines from obscure or up-and-coming regions This is one reason why Champagne is sold at a higher price than other forms of Sparkling Wine like Prosecco. Are you open to trying Sparkling Wine from Spain, Germany, or from Ontario to potentially save tens of dollars, or would you rather pay for the prestige of drinking Champagne?
At the end of the day, whether the cost of a bottle of wine is justified is really up to you, the consumer, and the price of a bottle of wine can only be as high as the market will support. A wine with a lower price may be more appropriate when you want to open a bottle on a weeknight without giving it much thought, whereas a premium wine with a higher price point may be something to savour on a special occasion. All aspects of wine, including its purchase, are subjective and personal.
Looking to learn more about what goes into the cost of a bottle of wine? A tour of Niagara Wine Country with Niagara Vintage Wine Tours is a great way to expose yourself to the best wines that Ontario has to offer at a range of price points. Contact our guest services agents at 1-866-628-5428 or at for more information or to sign up for a tour today!