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The Wine Was Overpriced

I read on Twitter a comment that a wine was overpriced. Then I began to think about what this statement means. It seems way too subjective. If one is not willing to pay more than $15 for a bottle of wine, is a $20 bottle of wine overpriced? Suppose the cost to produce a bottle of wine is $35, if someone who is willing to only pay $15 says that $35 bottle of wine is overpriced, is it really overpriced? What criteria are used to determine an overpriced bottle of wine?

This question requires more thought. For sake of argument, lets say that a price set for wine is the cost of producing the wine. I’d like to use the $35 figure for this example. One may claim that cost is too high (overpriced?), however if one uses premium grapes the cost to produce wine is greater. If one uses a double sorting table to sort grapes, the price increases. If the wine is aged in French oak, the price increases. If the wine is aged past the next harvest, the price increases. It is very possible to produce a $35 bottle of wine. Now the producer should be allowed a profit for the wine made. Now things get interesting. If the producer only makes $5 a bottle, that raises the price to $40. However the price will have to be much higher if the bottle has to go through the three-tier system of producer, distributor and retailer. The $35 bottle of wine may have to sell in a wine shop for close to $80. That will include the cost to produce the wine and a profit for the producer, distributor and retailer.

If the cost is over $80, one may have a case to say that it is overpriced. But can someone who only pays $15 for a wine legitmately state that the $80 bottle of wine is overpriced. I don’t think so. It appears that a criteria for overpriced wine is a wine that cost more than the price to produce it and a profit for the producer, distributor and retailer. Perhaps bloggers should take this criteria into account before making statements that may be factual or totally subjective.

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