I’ve been writing a fair amount of commentary lately, some of it dealing with wine prices, but only tangentially; so today I wanted to take a look at where fine wine prices are going, and perhaps identify some smart plays for the savvy wine shopper.

I’m dealing with some relatively expensive wines here, most in the $50 and up range, so while I understand the limited appeal of an article such as this, I still think it’s worth the effort. As we’ll most likely see, rises in wines at the higher end of the spectrum usually foretell price increases working their way down the pricing ladder, eventually affecting all fine wines regardless of price.

What I set out to do here started, as some other articles of late, as a melancholy look back at wines that I can no longer afford. It’s almost funny; when I worked through all these details I discovered that being no longer able to afford some of these wines had as much to do with mindset as it did with the actual prices of the wines in question, though pricing is a better place to start this discussion.

Wine Store image via ShutterstockNumbers don’t lie, and they are easy to understand, so let's begin by taking a look at the value of money. I’m going to be going back in time to about a decade to begin this exercise, though with Burgundy the time frame will be only five years. In any event, $100 of 2002 dollars would be worth about $128 in today’s money. So if the current release of a wine that cost $100 in 2002 is priced under $128 a bottle today, they are equivalent amounts of money. Conversely, $100 of today’s dollars would have be worth $78.50 in 2002. It seems as though I must have felt wealthier back then, though assuredly I wasn’t.

Another funny thing has happened here. For whatever reason my threshold of pain hasn’t changed in a decade. Back around 2002 I was comfortable paying about $100 for a bottle of wine, let's leave aside the discussion as to what form of mental illness this is symptomatic of for now. Today that threshold has remained much the same. It’s true that I made exceptions back in the day, just as I do today, but back in the day the exceptions were for things like Monfortino and Giacosa red label Barolo, two of the wines I can no longer afford, not due to some psychological barrier, but rather due to the rise in their prices. The rise that, in fact, kicked off this written exercise of mine.

We might as well begin with Barolo, there’s a bit of analysis that’s going to happen here so bear with me. Barolo had been, until about the 1997 or 2000 vintage, one of the greatest bargains in the world of wine. Exceptional wines traded at the level of lowly-classed Bordeaux, but that has changed. Today the greatest producers have been fully discovered, and a critic eager to attract a following has been lavishing praises on these wines as if they were the second coming of Christ, or at least Burgundy.

The explosion of pricing for top Burgundies, which we will get to, has pushed many collectors out of their comfort zones and into regions such as Barolo in order for them to satisfy their collecting desires. Truth be told there is some similarity between Barolo and Burgundy; they are both vineyard driven regions, relying on a single grape for their greatest wines, production numbers are small, and there are clearly delineated stylistic camps that people can choose wines from. But the wines are not really that similar, so the move of Burgundy aficionados to Barolo has been a bit of a head scratcher for me, but that's not stopping it.

Interest in Barolo has been simmering for some time now, and if not for the unprecedented string of vintage the region has enjoyed since 1995, and the accompanying production, it would have exploded long ago. This delayed fuse of sorts has let many people learn a lot about the region and the producers, and I think a critical mass has finally focused in on the greatest wines. This will be seen as an inflection point for the region, as names like Mascarello and Rinaldi turn into the Dujacs and the Rousseau of the region, with the wines of Conterno and Giacosa already being the Leroy and DRC.

Let’s take a look at some pricing, historical and current and see where prices have gone, and where they might go, helping to identify some smart buys from the region. Let’s begin with those two blue chips. I’ve listed the price for each wine on release, the price those wines are currently trading for and the price of the latest release.

1999 Bruno Giacosa Barolo Falletto di Serralunga d'Alba $90 Now $190 The 2008 is $210
1996 Giacomo Conterno Barolo Riserva Monfortino $185 Now $550 The 2005 is $440

As you can see, both of these wines have experienced roughly a doubling of price over the span of a decade, and while a good portion of the price increases can be attributed to the relative strengths of the Euro and the Dollar, the bottom line is that I’m no longer comfortable buying these wines. They have priced themselves out of my world. It’s also tough to justify paying more or about the same for a current release wine as one might pay for something with a decade of age on it, adding further weight to my decision to just say no to these wines, as painful as that has been.

One point worth noting: if all of these price increases were due to currency rate fluctuations, we might expect to see more consistency across the board for wines from Piedmont. Clearly that is not the case, and some producers are simply enjoying an explosion of demand. Here are some additional examples to help illustrate the point.

1999 Vietti Barolo Brunate $65 now $100. The  2008 is $125
1999 Vietti Barolo Rocche $70 now $135. The  2008 is $130
1999 Bartolo Mascarello Barolo $75 now $120 The 2008 is $100
1999 Giuseppe Rinaldi Barolo Brunate Le Coste $75 Now $180 The 2008 is $120
1999 Domenico Clerico Barolo Ciabot Mentin Ginestra $75 now $90 The 2008 is $100
1999 Paolo Scavino Barolo Bric dël Fiasc $75 now $90  The 2008 is $100
1999 Giacomo Conterno Barolo Cascina Francia $80 now $200 The 2008 is $140
1999 Luciano Sandrone Barolo Cannubi Boschis $100 Now $ 165 The 2008 is $150
1999 Giuseppe E Figlio Mascarello Barolo Monprivato $60 now $125 2008 $115

With an average increase in price somewhere around 30 percent, basically the rate of inflation, there is clearly something else at play with the jump in prices the Monfortino and the Giacosa have experienced, and that is most simply explained by demand. Interestingly Conterno’s Cascina Francia has only jumped about 50 percent over the past decade, so that wine remains a bargain, even if I no longer feel comfortable buying it. In fact, as you can see, all of these wines are now at, or across my threshold of pain, leading to some soul-searching and painful decisions.

I have to consider myself to have been lucky, buying these wines for these prices when I did, but I am a little blue at the thought of no longer being able to add them to my cellar. It’s a good thing I am well stocked in that regard, but things might not be as dark as they seem. For starters, the producers listed in bold above are still selling their wines for prices that make them relative values. Buyers of these wines today will look back in 10 years and probably regret not having bought more. These are the great producers of our generation, and the appreciation in pricing for their past vintages bodes well for their future. Less so for those of us still hoping to buy these wines for under $100 a bottle though.

1999 Fratelli Brovia Barolo Rocche dei Brovia $55. The 2008 is $75
1999 Fratelli Brovia Barolo Ca'mia $55. The 2008 is $80
1999 Cappellano Barolo Piè Rupestris Otin Fiorin $55. The 2007 is $90

Another pair of producers are worth mentioning here, though I was unable to find current pricing for their wines from the 1999 vintage. I would anticipate seeing pricing close to $100 a bottle for them next time they appear on the market. Their current release pricing has shown increases that exceeded those of the previous set of wines, mostly because they were even greater values in the past and had more ground to make up to reach fair market value. I put Brovia and Cappellano in the same club as Conterno, G Mascarello, B Mascarello, and G Rinaldi. Interestingly, all of them are firmly traditional producers, a style of Barolo the marketplace clearly can’t get enough of. If you wanted to invest in Barolo, this is where I would suggest you put your money. If you wanted to build a Barolo cellar, guess what, with just a few additions, this is also where I would tell you to put your money!

So that’s my little take on Barolo. Some wines have attracted more than their fair attention and are outpacing the pricing of the region, dragging another set of wines up in pricing behind them. Is this something unique to Piedmont? A fair question, and one we should answer by repeating this experiment with the wines of other regions. Since we’re in Italy, lets take a look at Tuscany in our next installment.