Forget Bordeaux, Fine Wine Never Comes Cheap While there are many factors that determine the pricing of fine wines, buying them will always cost you a pretty penny. Often, many of these fine wines don’t merit their price tags but anyone who has had any education in simple macroeconomics shouldn’t struggle to realize why buying fine wines will never come cheap. It is a simple matter of scarcity. As the British comedian John Oliver explains it, albeit with tongue firmly in cheek, when joking about a recent Harvard University multiple choice economics exam... “Kenya has two apples. The United States wants those apples. How many apples does Kenya have? A) No Apples” The simple fact is, if Bill Gates, poor example he looks like a white zinfandel drinker; if George Soros, Richard Branson, or anyone from Dubai whose name starts with Sheik decide that they will only be serving and drinking Chateau Margaux, this already expensive wine will reach epic pricing points. Exaggerated examples aside, scarcity, which affects all products produced anywhere, is even more prevalent in the fine wine markets. The buying of fine wines is no different than buying a hand-made car. Only so much, many in the case of the aforementioned cars can be produced in a given year. In the case of Bordeaux wines, there are only five Grand Cru producers and they have a very fixed amount of land to use in the production of their wines. Not only is their production limited but it’s also quite often a victim to reduced production based on weather, disease, labor shortages, Germans, or God just getting annoyed with the French from time to time. The great wines of Burgundy, especially their reds, can see production numbers halved based on the fickleness of the pinot noir grape and its reaction to extremes in weather on any given year. Conversely, a great vintage will see investors and enthusiasts alike rushing to cellar these same wines, raising demand without an equal increase in supply. This does not simply apply to the “noble reds” but certain whites as well and is not limited to France; Italy and Spain experience similar swings each year. So now you’ve decided to shift your pursuit of fine wine to California, perhaps even Oregon. Nope. Buying fine wines across the pond may require a second mortgage as well, ...to continue reading the rest of the article please, click here.