Why do many premium wines not justify the price?

In the world of wine, price has always been associated with quality. Bottles with high prices are often perceived as superior, reserved for special occasions and refined palates. However, recent scientific studies and market analyses reveal an uncomfortable truth for the wine industry: many premium wines do not justify their exorbitant prices, and the relationship between cost and quality is much more complex than we imagine.

The Science Behind the Perception of Quality

Research has shown that price significantly influences our perception of wine taste, often more decisively than the intrinsic characteristics of the beverage. A study published by scientists at the University of Basel, Switzerland, revealed that the consumer's subjective experience is strongly shaped by the price information presented before tasting.

In the experiment, 140 participants tasted three different wines with varying prices, presented openly, deceptively, or without any price information. The results were surprising: when a cheap wine was presented with a falsely high price, participants rated it as significantly more pleasant. The intensity of the flavor was also influenced, with more expensive wines consistently being rated as more intense.

Even more revealing was a study conducted by the California Institute of Technology and Stanford University, which used functional magnetic resonance imaging to monitor brain activity during the test. Researchers found that when participants believed they were drinking a $90 wine instead of a $10 wine – when it was actually the same wine – the brain region associated with pleasure, the medial orbitofrontal cortex,

It showed greater activity. This means that people weren't just rationalizing that expensive wine was better; they actually experienced more pleasure from consuming it.

The Myth of Price as an Indicator of Quality

DECO PROteste, a Portuguese consumer protection organization, analyzed approximately 1,500 wines over five years and found a reality that contradicts many established beliefs. Although there is a general tendency for more expensive wines to be of higher quality, this relationship is far from absolute. White wines priced up to 5 euros, which five years ago did not exceed average quality with 64%, achieved a good overall rating of 73% in the recent vintages tested in 2024.

The study revealed something even more significant: there are inexpensive wines of very good quality that surprise and surpass premium labels. Many consumers measure quality by price and choose more expensive wines for special occasions, certain that they will be superior, but they often pay more for the brand, marketing, and reputation than for the actual quality of the drink.

The Real Factors That Justify High Prices

To understand when a premium wine truly justifies its price, it is essential to analyze the legitimate factors that increase production costs.

1. Terroir and Location

Wines from wine regions like Bordeaux, Burgundy, Napa Valley, and Piedmont tend to be more expensive because the land in these areas is highly valued. The unique terroir imparts special characteristics to the grapes, resulting in wines with their own identity. However, this doesn't mean that wines from less famous regions are inferior – often, they offer equivalent quality at a lower price.

2. Limited Production and Rigorous Selection

Genuine premium wines are often produced in small quantities, with meticulous attention to detail at every stage. Hand-harvesting, bunch selection, the use of distinctive techniques such as bâtonnage , barrel fermentation, and extended aging legitimately increase costs. Super-premium wines may spend more than 24 months in high-quality oak barrels and additional months in the bottle before being released for sale.

3. Real Costs of Aging

Storage and aging represent significant investments. Wines that improve with age require ideal temperature and humidity conditions, occupy valuable space for years, and are subject to losses through evaporation or deterioration. It is estimated that 90% of wines should be consumed within one year and 99% within five years, making those with true aging potential genuinely rare and valuable.

When Price Is Just Marketing

Market reality reveals that many high prices are the result of sophisticated marketing strategies rather than superior quality. Renowned producers have already built a reputation and invested heavily in advertising campaigns, allowing them to charge premium prices regardless of the wine's absolute quality.

The phenomenon of "psychological pricing" exploits our tendency to associate high prices with superior quality. Techniques such as price anchoring, where an extremely expensive wine is presented first to make others seem more affordable, are widely used. Producers often create "premium" and "super premium" lines more for brand positioning than for substantial differences in production.

One particularly revealing aspect is that established companies set aside premium grapes for their most expensive wines and use the remainder to produce other wines. This means that the same company can offer comparable quality across different price ranges, but marketing and label prestige determine the final value.

The Role of Critics and Scores

Ratings from influential critics like Robert Parker impact sales and prices. One study demonstrated that consumers who received information about a high score before tasting rated the wine significantly better than those who tasted it first and received the information afterward. This shows that critics' opinions not only inform but actively shape our sensory perception.

The problem is that this system creates a cycle where wines with high scores command premium prices, regardless of whether their intrinsic qualities justify such valuation.

The Difference Between Price and Value

It is crucial to distinguish between the cost of production, the selling price, and the perceived value. Organic wines, for example, can cost 100% to 300% more to produce due to sustainable practices, the use of natural fertilizers, and lower yields. These additional costs are justifiable and transparent.

On the other hand, many premium wines command high prices simply because the market accepts them. The difference between a €20 wine and a €100 wine is not always proportional to the difference in quality. Often, the more expensive wine may only be 20% to 30% better, not 400% better as the price suggests.

Wines with Excellent Value for Money

The market offers numerous examples of wines that deliver premium quality at affordable prices. Emerging regions such as the Douro in Portugal, Mendoza in Argentina, and lesser-known areas of Chile produce exceptional wines that rival famous labels.

Understanding psychological and market mechanisms is fundamental to making more informed purchasing decisions. Educated consumers can identify when a premium price genuinely reflects superior quality and when it is primarily the result of marketing and brand positioning.

Some strategies for better assessing the true value of a wine include blind tastings, where price and brand do not influence perception; exploring lesser-known regions and producers; seeking recommendations from independent experts instead of just commercial scores; and considering the context of consumption.

Scientific studies have shown that our price-shaped expectations alter our actual tasting experience, activating pleasure centers in the brain regardless of the wine's intrinsic quality. This doesn't invalidate the existence of truly exceptional wines, but it reveals that consumers often pay more for the psychological experience and status than for the absolute superiority of the product.

The key lies in developing an educated palate and a critical understanding of the market. Excellent wines exist in all price ranges, and many affordable labels offer experiences comparable to bottles five times more expensive. In the end, the best wine is not necessarily the most expensive, but the one that provides the greatest pleasure within the context and individual budget of each consumer.

References:

• Plassmann, H., O'Doherty, J., Shiv, B., & Rangel, A. (2008). Marketing actions can modulate neural representations of experienced pleasantness. Proceedings of the National Academy of Sciences , 105 (3), 1050-1054.

• Schmidt, L., Skvortsova, V., Kullen, C., Weber, B., & Plassmann, H. (2017). How context alters value: The brain's valuation and affective regulation system link price cues to experienced taste pleasantness. Scientific Reports , 7 , 8977.

• Werner, C. P., Birkhaeuer, J., Locher, C., Gerger, H., Gaab, J., Heimgartner, N., & Colagiuri, B. (2021). Price information influences the subjective experience of wine: A framed field experiment. Food Quality and Preference , 92 , 104191.

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WRITTEN BY:

Pedro Fernandes

Pedro Fernandes is a Portuguese winemaker who has been involved in viticulture since he was 11 years old, where he started making his first wines with his father and doing tasks such as pruning.

Since then he has never stopped and in 2018 he decided to dedicate himself to the wine sector, starting by doing "everything backwards". He began by taking wine specialization courses such as WSET (Direct Wine) and Wine Expertise (ISAG) in 2018/2019. Then he graduated from the University of Nebrijia in Madrid, obtaining an MBA in Oenology (2020). In 2021, at the age of 39, he decided to pursue a Bachelor's degree in Oenology (UTAD), and against all odds, he finished the course in 2024.

Along the way, he created his first personal wine brand - Chãos - and completed an internship at the prestigious Chateau Latour (in Bordeaux).

Currently, he works as a consultant in the wine sector, where he plays a role not only as an oenologist, but also in creating business strategies for wine producers, with a current vision of the market, which includes resources from Digital Marketing and Wine Tourism.