In 2011, a psychologist named Richard Wiseman ran an experiment at a festival in Edinburgh. He gave more than 400 people a variety of wines — red, white, Sauvignon Blanc, Claret, and so on — and asked them to distinguish the expensive wines from the inexpensive ones. The results of the double-blind study showed that volunteers could correctly guess expensive or inexpensive 50% of the time — in other words, about as “by chance” as you can get.
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How do you know when wine is worth the price?
Spoiler: The Prohibition-era pricing system doesn’t make it any easier.
Many things can change our perception of wine. Studies have shown that bottle shape, music, even lighting can influence how much value we put on what we’re drinking. The biggest influence, however, is the price. But thanks to a wine-distribution system from the days of Prohibition, the price tag on your wine bottle isn’t telling you the whole story.
The price tag on your wine bottle isn’t telling you the whole story.
In the U.S., alcohol moves, legally speaking, through what’s called the three-tier distribution system. Its original role was to regulate a bustling, re-legalized alcohol industry. It installed a distributor who would act as a middleman between producers and drinkers, making sure big producers didn’t muscle out their competition.
And it worked — for the time. But the system never evolved. While the technologies that would give producers the ability to get their own product to their customers certainly evolved since the 1930s, the U.S. kept its three-tier distribution.
Here’s how it works. Producers make wine — your Cabernet Sauvignons, your Chenin Blancs — and sell it to a distributor. The distributor sells that wine to wine shops, restaurants, bars, and so on, until it reaches you. The wine gets marked up every time it moves, often as much as 50% (or up to 400% if you buy it from a restaurant or bar).
The wine gets marked up every time it moves.
Sure, you aren’t going to be able to buy wine for what it costs to make; something has to pay for those beautiful acres in Napa. But with our current system, you’re paying for a markup that we shouldn’t need anymore. Some states have already decided to cut out the middleman, allowing folks in the U.S. to ship cases of wine home from the winery.
And now brands like Naked Wines are taking it a step further, connecting independent winemakers directly to consumers, showing us a world where the middleman is removed altogether.
One thing’s for sure: With our current distribution system, no matter how expensive or inexpensive you think your wine is, you’re definitely paying too much for it. For now.