Ever wonder why wine is so expensive? Or how much it costs to make a bottle of wine? Or better yet, what it costs to get the wine to you? Sadly, you are paying way beyond what it cost to produce the wine, thanks to a Byzantine distribution system that is a hangover—excuse the pun—from the days of Prohibition. The same system that drives up your per-bottle cost also makes it hard for winemakers to make a buck.
Here is the cost breakdown for a bottle of Oregon wine (courtesy of The Oregonian). The percentages are similar in other states as well:
It’s not the winemakers fault
Adding up the numbers you will find that more than 55 percent of the money you spend goes to wholesalers and retailers, while the winemaker gets 5 percent. So don’t blame the winemaker for the price of that bottle. Blame Prohibition.
In 1933, Amendment 21 was added to the U.S. Constitution effectively ending Prohibition. It also gave individual states the power to regulate and control alcoholic beverages, and forced the federal government to take a “hands off” approach on booze. The result? States created new regulatory frameworks, most mandating that producers sell to wholesalers who, in turn, sell to retailers and restaurants who, in turn, sell to us.
If you found a way, in any other business, to effectively eliminate the middleman, you’d be hailed as a wizard. In the liquor industry, thanks to these arcane laws, you’d be fired.
So what’s a wine drinker to do?
Read up on the debate (at Free the Grapes or at The Wine Institute) and get involved as you see fit. Consider lobbying your state legislators. Many states are in the process of debating their own role as well as that of middlemen in the alcohol industry. In the meantime, you might consider joining “case clubs” at your favorite winery. Membership provides discounts on all of their wines and access to their hard to find wines.
Cheers!
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