How much has globalization helped U.S. wine drinkers?

by on June 23, 2008 at 6:19 am in Food and Drink | Permalink

More than I had thought:

For instance, the
real price (in 1988 prices) for the basket of the entire Top 100 list [for the U.S.] was
$4,313 in 1988; $3,132 in 1993; $2,533 in 1999; and $2,421 in 2004. That is nearly a 44% decrease in prices
from 1988 to 2004. At the same time,
there was no significant change in the quality of the wines on the Top 100
list.

Here is much more information, from Karl Storchmann.

jn June 23, 2008 at 7:35 am

I am concerned that they have not fully corrected for the fact that the Wine Spectator takes price into account [or more accurately, what they perceive to be "good value"] when creating the Top 100. While I believe the sense of the result, I am not persuaded by the methodology.

And of course, if we want to include positional consumption or subjective perceptions of quality (which include delight in the label), then we should be looking at a fixed basket, such as second growths from Bordeaux.

Bill Harshaw June 23, 2008 at 8:17 am

Is wine the rare exception to the rule that globalization hurt the rich wine drinkers of the world, while benefiting the poor T-shirt wearers?

(And while I’m at it, why does your spellcheck challenge “globalization”?)

liberalarts June 23, 2008 at 10:56 am

I suspect that the last 4 years have been hard on this trend, since between 2004 and 2008 the dollar has declined 20% against the Euro. I only speak from the experience of say the 1000 to 1100 range of wines, but they definitely have trended up (in $ prices)in the last couple of years.

Steve June 23, 2008 at 3:34 pm

I am concerned about the following finding:

…replacing an Old World wine (French, Italian, etc.) with a New World wine (US, Australia etc.) lowers the average real price by 1%…

If this is true; and it is supported the 2 cheapest years to buy wine, 1994 and 1996 having very high composition of U.S. wines in the basket; then how do we know that we are not indeed observing the effects of trade protection itself! The price index is calculated by taking the cost TO AMERICANS in USD. When we find that US customers pay less when they primarily buy US wines, how is this evidence of the benefits of globalization? Maybe I am misinterpreting their methodology…

Sean June 23, 2008 at 6:34 pm

Person – did you lose your tastebuds and sense of smell in some sort of freak accident as a child or are you just trying to get a rise out of everyone? There are plenty of $40 wines not worth the money (and plenty of decent $10 wines), but that in no way proves that expensive wine is no different from cheap wine.

crack June 24, 2008 at 10:58 am

Felix Salmon’s analysis of this shows it’s pretty much bunk.

http://www.portfolio.com/views/blogs/market-movers/2008/06/23/are-top-wine-prices-really-falling

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ElChupacabra October 23, 2010 at 9:50 am

The quality of the wine I don’t think it will ever change because the process is the same for those who make this wine and sell it.I guess if you really need to drink a high quality wine you should try to find it in a wine cellar of a wine collector.Wine cellars

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