liquid investments
MICHAEL FRIDJHON: Wine inflation over half a century runs ahead of market expectations
Nonetheless, price is not always the best arbiter of taste, as some price distortion on some brands reveals
Half a century is a long time in the world of luxury. Tastes change, affecting perceived value perhaps more than the actual input costs. A price list I came across from the Civil Service Wine and Spirits Store (which in the 1970s was Johannesburg’s finest wine merchant) provides a useful insight into what has happened in the luxury wine sector. In 1971 you could buy a bottle of 1964 Dom Perignon for R7.50, and a bottle of Moët for R4.50. Today the current release of Dom Perignon sells for R2,250 while the Moet trades from around R450 upwards. Neither of these wines comes from a specific vineyard: they are made mainly from bought-in grapes, where the only volume limitation is the potential of the Champagne region to deliver sufficient fruit of suitable quality. If you index price inflation here the Moët has increased 100-fold, the Dom Perignon three times that amount. Clearly, the latter has become more desirable compared with the Moët. In 1971 a bottle of Nederburg Cabernet cost abo...
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