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Raising The Ante On Prices

Photo by: Greg Gorman

Posted: Aug 30, 2006 4:17pm ET

Prices for a few elite California wines are heating up--although given the small size of these wineries, the rise is more like an outdoor patio heating lamp than a roaring bonfire on campus before a big football game.

Harlan Estate is selling its 2004 Cabernet for $350 a bottle, effectively as a wine future, since you need to pay now and wait for the wine. It won’t be released until early 2008.

That’s a sizeable increase for the 2004, since the 2002 sold for $265 as a prerelease and the 2003, being distributed next year, also sold for $265 to mailing-list subscribers. But Harlan still trails Screaming Eagle by several wingspans. The high-flying bird of prey is now $500 per bottle.

While this might appear to be a risky move, I’m sure it’s founded in owner Bill Harlan’s belief that the wine is worth it and demand is sufficient to command this price. He has two years to sell some 2,000 cases. (Also Harlan wines are seldom found at retail, so he has more control over the prices.)

In looking at California’s highest-priced wines, Harlan has created his own armada of elite offerings, including his other winery, Bond, which makes single-vineyard wines, most of which I think are terrific, if pricey. A sheer pleasure to drink if someone else brings or buys.

For vintners such as Harlan, and many of the wineries listed below, the pricing strategy is based on so-called “first growth” Bordeaux prices. And frankly, these California wines still cost one-third to one-half of what the 2005 Bordeaux are selling as futures.

One more thing: Many vintners publicly express concerns about high prices, yet privately they’re thrilled when someone else sticks their neck out and raises the ante. It gives everyone one else room to tack on a few dollars to their offerings.

Here are some of California’s high rollers:

• Screaming Eagle Cabernet Sauvignon Oakville 2003: $500
• Paul Hobbs Cabernet Sauvignon Oakville Beckstoffer To Kalon Vineyard 2002: $265 (the '03 dropped to $235)
• ZD Wines Abacus Napa Valley NV $375: (yes, it’s non-vintage, a solera style that blends years)
• Colgin Cabernet Sauvignon Napa Valley Tychson Hill Vineyard 2003: $250
• Sloan Rutherford 2002: $245
• Harlan Napa Valley 2002: $245
• Bryant Family Cabernet Sauvignon Napa Valley 2003: $235
• Bond Melbury Napa Valley 2003: $230
• Bond St. Eden Napa Valley 2003: $230
• Bond Vecina Napa Valley 2003: $230
• Hundred Acre Cabernet Sauvignon Napa Valley 2003: $225
• Araujo Cabernet Sauvignon Napa Valley Eisele Vineyard 2003: $215
• Schramsberg California Napa Valley 40th Anniversary Late Disgorged Reserve 1994: $200 (magnum)
• Joseph Phelps Cabernet Sauvignon Oakville Backus 2003: $200

Have you tried any of these wines?

William C Towne Jr
Valencia, CA —  August 31, 2006 1:24am ET
I've had none of them. Never will. These prices, along with the '05 Bordeaux are ridiculous. I don't agree with putting the Schramsberg there, however, and @ $100 per bottle equivalent, it's really not that bad considering what it takes to make a true sparkling wine in the Champagne style. Much more time, cost and effort than making a cabernet. These are trophy wines, nothing more. They may be top quality, but when you have to worry about each ounce of the wine costing you $10, $15, $20?? One ounce!! And are they really 10 to 15 times better than so many wines out there? Nope... these are for the people who have money and want something to show off. I know you've said it before, James, that you have had to stop buying long time favorites due to price. This is the good and bad of a free market economy. The good is plenty of others out there making some wonderful wines for the rest of us who have to keep our budgets in check.
Barrett Miller
Indianapolis, IN —  August 31, 2006 2:58am ET
The prices are ridiculous and anyone on a budget will have a problem justifying the expense when you can buy more at equal quality for less. I have a wealthy friend who opened a few bottles for a Christmas dinner I cooked for his family and friends. Those bottles were the 97' Araujo Eisele, 99' Insignia, 99' Caymus SS, 90' Latour and 87' Le Gay and 95' Lynch Bages. It was a magnificent night! They are all great wines, some better than others. And when you're not thinking about price, your opinion may be a little less biased. The point is on that particular night the Araujo won me over. I find myself using that bottle as a benchmark for all other Napa Cabs (even though they aren't created equal). If I ever find that wine in Indiana (unlikely), I may make room in my budget for another special occasion.
Tim Webb
high point nc —  August 31, 2006 9:08am ET
supply and demand is everything you need to know about economics. as long as people will pay the price, then the price is right. that being said, these wines have little to do with most people who drink wine. just as hip hoppers who couldn't tell chrystal from coca cola order it to demonstrate their wealth, so a lot of bordeaux, burgundy and california cab is bought for the same reason, frequently to be drunk too young by the wealthy and insecure. i remember when robin williams said "cocaine is god's way of saying you make too much money". perhaps harlan is now in the same company.
David A Zajac
August 31, 2006 9:40am ET
There was a blog recently that people were asked what is in their cellars, did anyone notice how few people mentioned California Cabs! This, I think, is a wake up call and these continued price increases, even for Screaming Eagle and Harlan, arguable the two best in California (Sloan could be included, but only 2 vintages so far, so I will hold off on including them). This is hard to swallow - pun intended.I have been on Harlan's list from the start, but don't think I can continue at this price, its just too much for all but the filthy rich, and I don't qualify to be in their club anymore. Disappointing yes, but I will simply refocus and move into different areas of winedom.
Paul Anderson
Longview, TX —  August 31, 2006 10:09am ET
This is a curiosity for me and that is all. I'll never buy them and will probably never taste them to know what I'm missing. It is my opinion that too much space is dedicated to wines that only a select few can afford and then fewer that can actually acquire. Harlan wines seldom make it to retail store and are sold only to a limited list. I would reather see much more on available wines that are very good in the 15-50 dollar range.
Tom Breneman
eau claire, WI —  August 31, 2006 10:19am ET
Wonderful what the free market is capable of doing. Anyone out there have any idea how much copy is spent reviewing, discribing, discussing these wines,, when in fact very few of us will ever,,, make that nearly any of us,,,will ever have these wines? Obviously I'm tired of hearing about them, and hope to continue reading more about the great valued wines of California. They all spit the same......
Anthony Clapcich
August 31, 2006 11:42am ET
James-- let's forget pricing/value issues for a moment...most vintners that I spoke to in Napa say they believe Napa Cabs have about a 10-15 year lifespan, and in fact, most try to drink their gems before 10 years. Why can the monsters of bordeaux last so long (in fact, some are not even ready to drink until about 20 years of age!)while the Napa cabs start dying at a relatively young age? When do you start/stop drinking your Napa's? Does it make sense to buy a $500 cab that will be dead in 10 years?
James Laube
Napa, CA —  August 31, 2006 11:57am ET
Anthony, true most Napa Cabernets are ready to drink earlier than Bordeaux and for me six to 10 years is ideal. Still, I've had many Cabernets (Phelps Eisele, Diamond Creek, Stag's Leap Wine Cellars and Chateau Montelena, to name a few) that have aged well and even the last time I tried some of the "older" Screaming Eagles, thought some would be alive and well in 20 more years and probably in better condition than me. My advice: drink your wines young, age a few if you want, but let your friends do the long-term cellaring and nuture those friendships.
La Quinta, CA —  August 31, 2006 12:39pm ET
What is amazing to me is that almost everyone that has posted on this blog has never tried Harlan. It is that good. Period. And you can try Harlan. Get a bottle of The Maiden for around $100. Or try The Matriarch for the same price. These wines are phenomenal. They are not just "Trophy Wines", but very fine, hand-crafted efforts. I have been fortunate enough to try Harlan on a few different occasions, even at the winery. If you were able to go to the winery and see exactly what they are doing to make these wines, then you might catch a glimpse of why the wines command the prices they do. Don't condemn the "cult" wines. They are what they are. Dustin
Mark Mccullough
GA —  August 31, 2006 12:48pm ET
Let's be honest. A good percentage of subscribers for these exclusive wines are flipping all or part of their purchase for an immediate profit or to fund the bottles they keep. Check out what they sell for on winebid. I can't blame Harlan for wanting to capture more of their market value, silly as it is.
Alan Vinci
springfield, n.j. —  August 31, 2006 12:49pm ET
As long as people are willing to pay the high prices of the so called "cult cabs",these wineries will continue to keep raising the cost.I for one will not be one of them.I collect wines to DRINK, not to be placed on an auction block 10 years from now.As much as I love good cabs,there is a limit to my spending, and at 250.00 to 350.00 + a bottle it is way past my budget. I agree with Tom, I am also tired of hearing about wines that very few of us will ever have a chance to taste.There are many "good value" california wines to look foward to. Sorry Harlan, maybe in the next life...
Mr Randy Beranek
Napa, CA —  August 31, 2006 2:50pm ET
I've been on the mailing list of several of the wines listed for many years. Clearly there is no argument that the pricing strategy of these vintners has no relation to value or quality, either in relation to their competitors or their own products' recent vintages. Harlan has raised their prices each year since their inception and I cringe each time I receive their offering as I open it. Despite this, I continue to purchase whatever they are willing to hand over. The big difference between Harlan and the others is that they truly sell their wine in futures (payment required 18 months in advance including the cost of shipping)whereas the Sloans and Colgins of the wine world do not.Like everyone else who has weighed in on this, I am tempted to pass on the purchase when I see such price increases. However I do know that this is still the cheapest avenue to obtain these wines and that if I decline a single offering, there is a long line of others waiting to snatch up my allocation.The trend is a bad one and the list of wines offered by James will grow quickly in short order as a result. The dilemma is "is one glass of Harlan worth an entire bottle of Lewis Reserve"? You needn't look very hard to find even more extreme and compelling examples.
Mark Mccullough
GA —  August 31, 2006 5:48pm ET
If you think of it as spending a memorable evening with a fantastic bottle of wine, is $350 for Harlan any more expensive than 2 great seats at a sold-out concert or a broadway show, a dinner at a 5 star restaurant, or one night's stay at a fine hotel or vacation rental? All of those things are gone the next day, just like wine. You could get worse seats, see a different show, buy a cheaper dinner or downgrade your hotel but you choose to pay a premium for the added quality of the experience or sometimes just to say you've been there and done that. Pebble Beach charges $350 for a round of golf, but the limited supply and high demand keep the tee times filled because golfers don't pay to just play golf, they pay for the reputation and experience of playing Pebble Beach. Saying the fee is too high at PB as compared to other excellent golf courses is irrelevant since, in the buyer's mind, there is no real substitute. The new reality is that Harlan and SE, whether you argue it's deserved or not, have gained a reputation as the CA Cab equivalents of playing Pebble Beach and, with a waiting list of buyers, have simply priced themselves as such.
Scott Boles
San Diego —  August 31, 2006 7:59pm ET
I agree with many of the posting about the quality to price ratio of many of the California Cults. While I have some of these wines in my cellar (the '01 Sloan was dynamite), the increasing prices are causing me to alter my wine buying habits. My concern is not with the cults, but the solid Cali cabs - wines that consistently get high scores (eg. Camus special selection, Shafer hillside, Phelps Insignia, etc.). Typically, there is an upward drag on the price of these wines if vintners see that there are enough buyers to shell out the bucks for the big guns. This is similar to what you see with the Bordeaux super seconds. I still enjoy high quality California Cabs and would hate to be priced out of this category of wines. Despite the naysayers, these wines have a quality and uniqueness all their own.
Paul Anderson
Longview, TX —  August 31, 2006 8:43pm ET
I agree with your comparison Mark. There is nothing wrong with any company selling their product for a price the consumer will spend. It may be for true quality or perceived quality. It may be just for the experience and the opportunity to go home and say, "I played Pebble Beach". I wouldn't pay if but I did visit and step out on the 7th fairway (I think) just to say I did. But when I read a golf guide, I go for the courses I can reasonably afford to play and even get to. When it comes to wine the same dynamics apply. For me, I'd like to learn more about what is good and affordable and available to me. I gain much more from a WS report, article or blog on a $45 bottle that scores high and is likely to be for me more enjoyable because I actually can taste it. Like I said, the "elites" is a curiosity to me but not much help in my ongoing education and search for wine enjoyment.
Mark Mccullough
GA —  August 31, 2006 10:14pm ET
I can't disagree with you Paul. Everyone has their own relative guide as to whether it's worth it or not. Myself, I'm in your range for "normal" consumption but love to pull out a classic now and then for a special experience. You only live once! p.s. the 7th is the scenic par 3 that juts out into the bay. Heaven!
Apj Powers
Dallas, TX —  September 2, 2006 2:08am ET
Randy, I personally would rather have the Lewis RSV btl over a single glass of Harlan that I have to pay 4 yrs in advance for. I love Lewis Reserve. One of the best wines price/quality. I do think Harlan is a terrific wine but paying that far in advance sounds crazy to me. Scott, my fear is also that wines like Lewis RSV will skyrocket from the effect of the pricing strategies of Harlan and SE. James, I love that quote about nuturing those frienships. That's my new strategy. And, finally, I can understand why these wineries raise their prices when they see other people making more off their wines than the winery.
Michael Tracy
trabuco canyon CA —  September 3, 2006 12:47pm ET
True, a case of 94 Harlan will never grace my cellar, but neither will a Ferrari grace my garage nor Chateau in Sun Valley will I own.I like James' advice, because it's true whether your love is fast cars or fine wines. Get to know those who do, and you may get to at least drive that McLaren, or taste that 94 Harlan.It is the market that determines value. Every entreprenuer who starts a winery dreams of the success that Harlan, Screagle, and, dare I say it Kosta Browne have achieved. If you are one of the very talented few who succeed at that level, you are entitled to sell your product at the highest price you can, and you are under no obligation to sell to anyone in particular.I know that too well as I was notified by KB that I would not be offered any 2004 vineyard select wine, even though I am on their mailing list and bought the 2004 SC and RRV this spring. I hope I will get a shot at them next year. I understand that. I don't like it, but I get it. I fully expect KB will jump their prices next year as they should. If it's too rich for my blood, there are several folks with fatter wallets than mine ready to ante up.
Joseph Bozzo
woodbridge —  September 13, 2006 1:45pm ET
James, i don't pity anyone who feels that they are overpaying for a top california cab. In Ontario, Canada, you may be familiar with our tax structure and realize that wines such as the 02 shafer hillside select, which is just now available requires close to $300.00 per bottle. I for one would gladly pay that price for harlan. Recently, i had the pleasure of two bottles of 2002 peter michael and it was worth every penny it cost me. I am less concerned with the price of wine as i am with the unavailablity in our country. I have had the pleasure of tying many top cabs from napa in the past ten years, including montelena, shafer, caymus, araujo, la jota, and hundred acre. The quality of these top wines is outstanding, and worth every penny for us Canadians who unfortanetly see very little of this product. All i can say, is enjoy every bottle you privelaged few can possibly get your hands on.

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