Monday, March 10, 2008

To the point…Parker’s influence on the price for fine wine

Boris Guillome

The practice of modeling wine ratings on the American 100-point scale is one of the several reasons Robert Parker has become the most influential (and controversial) wine critic in the world.

His impact today on the wine market cannot be understated. It is easily observed each year in Bordeaux where producers anxiously await his reviews to determine the prices for their “en primeur” wines…in other words, Parker swirls and the rest of the world listens!

This reality was especially evident for the 2002 vintage when Parker decided to cancel his tasting trip to France in the spring of 2003. This forced the Bordelais to re-learn the art of selling an entire vintage without his reviews to post.

There is not an annual fluctuation in price based on the quality of any given vintage when it comes to the finest collectible American wines. Prices here for the most sought after new releases can only go up, and sometimes to surprising new heights. A good example is the latest Screaming Eagle release at $750 per bottle on the mail list. This represents a 50% increase from the previous vintage.

This being said, a Robert Parker/Wine Advocate rating can dramatically influence pricing on the secondary market for a high profile winery or allow a new comer to become an overnight sensation. Some may recall the 2003 Scarecrow Cabernet Sauvignon whose market price increased from $125 to $900 per bottle after receiving a 98 points rating from Robert Parker. The demand for this wine has only increased despite the price tag.

I think that it would be wrong to conclude that a high Parker review inevitably influences the price of any given wine. It certainly provides for a selling trend as a wine rating below 80 points can hardly be sold while a 90 points review is a sure guarantee that the wine will sell at least somewhere.

There are 3 crucial elements needed for the price of a wine to be directly influenced by Parker:

  • Supply and demand: A wine may receive an outstanding rating but if it is widely available on the market place, it will undeniably become popular. Popularity without rarity will most likely not create any substantial increase in price. Rule number # 1, only micro-production wines can expect to see their prices go up with time.
  • The pedigree of a wine: Unless you are going for a first impression, wine buyers always consider the already established reputation of a wine. A good track record brings attention to a label and that combined with top Parker ratings almost always results in greater prices.
  • The magic number: This last element is rather new but none the less true. When it comes to collectible wines, 95/100 has now become the new 90/100 as collectors tend to shy away from lesser rated wines. The price for blue chip bottles can go up exponentially past 95/100 points.

Since Robert Parker introduced his 100-point scale to the world, the scores have taken on a life apart from the actual reviews of the wines. Some detractors may conclude that much of the wine buying has now been reduced to a numbers game. I would argue that the easy to understand scale turned many novices toward wine buying and that has helped the entire wine industry.

Above all, there can never be any substitute for your own palate, as a consumer you are the ultimate judge!

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