As featured in the May issue of Longevity: Consider, if you will, two prominent South African wines, the first being Chateau Libertas, selling for approximately R30 a bottle and the second Waterford The Jem 2006 for R680 a bottle. As wines, they are at least similar if not interchangeable in intrinsic terms, both being red blends that come in 750ml pack sizes, but the latter somehow manages to be more than 20 times more expensive.
When goods with the similar characteristics differ in price, a reasonable expectation is that the more expensive good will, on average, be of better quality. But how much of a difference in quality is purely symbolic and how much can be truly experienced by the consumer?
Make no mistake, there will be a significant difference in input costs between Chateau Libertas and The Jem. First and foremost, Chateau Libertas is part of a huge corporate portfolio while The Jem is the product of a privately owned estate, and each party will have different expectations regarding return on investment. Then, of course, there are input costs to do with vineyard, cellar, packaging, marketing and distribution. Ask any industry insider, though, and they scoff at using production costs to justify selling a wine for over R250 a bottle.
So what to think of The Jem’s R680 price tag? It’s about prestige pricing and what’s going on in the market at large. The Jem and the increasing number of other South African wines at R500 a bottle and up are being priced so as to be on a par with wines of similar quality from elsewhere in the world.
If you’re wondering whether or not you should treat yourself to a bottle of The Jem, then bear in mind the following: Research has shown that individuals appreciate the same wine more when they think it is more expensive.
When 20 adult test subjects involved in a 2008 study were asked to taste the same Cabernet Sauvignon, labeled with different prices, and then to choose their preferred bottle, they reported experiencing pleasure at greater levels when tasting the sample that apparently cost more. The result was corroborated by brain scans, the sample marked as more expensive triggering activity in that part of the brain that registers pleasure, even though another part of the brain that interprets taste was not affected.
A problem arises in that according to another 2008 study, average wine drinkers who are unaware of the price do not derive more enjoyment from more expensive wine, and in fact enjoy them slightly less (this based on a sample of 6 000 blind tastings).
Before everything becomes entirely farcical, however, there does appear to be a positive relationship between price and enjoyment for individuals who have done some wine training. Skeptics will no doubt conclude that the appreciation of fine wine is a particularly bourgeois learnt behaviour, the various appreciation courses perpetuating a divide between wine insiders and wine outsiders but another way of explaining the difference between the preferences of ordinary punters and aficionados might be due to innate ability, some of us able to smell and taste more acutely than others and therefore more inclined to pursue wine as a subject.