Why would a magnum cost more than two regular bottles, but a split also cost more than half a regular bottle?

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Dear Dr. Vinny,

I am trying to understand the pricing criteria for the various bottle-size formats. If I buy a 750ml bottle of inexpensive wine for $9, I may very well be able to buy a magnum of the same wine for $15. However, if I buy a 750ml bottle of wine for $35, odds are I will be paying $80 to $95 for the magnum. On the other side of the coin, if I buy a 750ml bottle of wine for $35, odds are I will be paying about $25 for a half-bottle of the same wine.

So, with better wines, why is it that for a whole laundry list of reasons you pay more for the magnum than you do for two 750s, while at the same time, you pay well more than half the 750 price for a 375ml bottle? Personally to me, it sounds like a real scam, but I’m interested in your take.

—William G., Mountainside, N.J.

Dear William,

A couple of basic economic variables are at play here, namely, supply and demand. Fewer magnums (the equivalent of two standard bottles) and splits, or half-bottles, are made than typical 750ml bottles. With a smaller inventory of these bottle sizes, wineries are motivated to raise the cost higher than just doubling or cutting the price in half.

Supply costs for these off-size bottles can be higher. It starts from the materials side of things—different-size bottles and packaging incur costs, as do storage and shipping.

My take? Magnums are special, impressive, make great gifts and feel more special than typical bottles, and I’ve come to expect to pay more than twice the price of a standard bottle. I’m bummed that half-bottles are priced at the sort of premium that you describe, but I’m also known to order them regularly when I’m dining out. It’s a terrific option when I’m eating alone or my companion doesn’t want to share a full bottle of wine with me. In that case, I’ll gladly pay a premium for the convenience of getting a wine I’m excited about.

You bring up a good point about how this differs with inexpensive wines, which are more broadly available in larger-format bottles. I think this is because pricier wines are thought of (and priced as) luxury items, but wines with a price tag under $10 are considered values. No matter what the price point, producers are going to price a wine based on the maximum amount they think they can get. With pricier wines, their perceived value can be threatened if they’re discounted—if I can buy a $100 bottle for $50, I may never pay $100 for that same bottle again.

But value wines don’t suffer the same stigma. If I’m in the market for a $9 bottle of wine and I can get the equivalent of two bottles for $15, I’ll probably go with the better value. And suddenly I spent $15 instead of $9—benefiting the producer—and feel like I got a good deal on a value wine.

—Dr. Vinny

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