These are cloudy days for the economics profession. Scan the business pages and you'll see the world is over a barrel. The U.S. recovery has been stalled like a Pinto with fouled plugs. Greece, Ireland, Portugal, even Italy are wailing like soccer players feigning injury. It's a global, fiscal mess.
But if you want a glowing example of how economics tends to work better in theory than in practice, consider wine. There's often scant relationship between price and value, at least when you define value in terms of quality.
Economists have two basic ways of explaining prices, the so-called subjective and intrinsic theories of value. Subjective theories essentially posit that prices are a function of how much people are willing to pay for something that's in limited supply. To some extent, this explains the crazy cost of coveted luxury wines. People with deep pockets will fork over a premium for exclusivity and the bragging rights. Intrinsic theories, meanwhile, maintain that prices roughly correspond with the cost of producing something. This more or less can account for lower-end wines, which take advantage of manufacturing scale to keep production costs low.
But in between there's a vast ocean of products that deliver superior value at irrationally low prices. I'm talking wines in the $12 to $20 range, the sweet spot for people with discerning tastes, little pretense and limited budgets. Why don't many of these worthy wines cost as much as their higher-priced competition? The reason is simple: anarchy. Producers often can't charge more for such products because they lack the marketing clout or business acumen to compete head-on with the luxury and mass-market segments that employ sharp-pencilled accountants and know how to court the influential wine press.
Just as important, consumers of these middle-ground wines tend to be blissfully antithetical to brand loyalty, preferring to move from one wine to another for the sake of variety. Even if they return to the store with the intention of buying more of the same great beverage, the stock frequently is sold out because fine wine is bottled in small quantities. In other words, just as demand starts to grow, supply runs out. By the time the supply returns (say, with the next vintage), the consumer has moved on to a new favourite. That old "law" about supply and demand? It doesn't apply in a tidy way to the prices of many wines, not where quality is concerned.
I'm generalizing of course. Some $20-and-under wines below are a bargain because European producers in particular often work from land paid off generations ago, so productions costs don't include debt charges for new vineyards. Some also were harvested by labourers earning dollars a day. But I think you'll agree the value in these wines, most from today's Vintages release in Ontario, is not fully reflected in the price.
Éric Texier Terroir de Vaison-La-Romaine Côtes du Rhône-Villages 2007 (France)
SCORE: 90 PRICE: $13.95
Fruit for this full-bodied red was clearly brought in before the hot 2007 harvest could rob it of crisp vigour. At a relatively tame 13-per-cent alcohol for a 2007 Rhône, it's nicely balanced, with plum and cherry flavours, a polished texture and lively finish. It would pair well with a range of dishes, from roast chicken to braised red meats.
Château Pindefleurs 2007 (France)
SCORE: 90 PRICE: $20
Here's a Grand Cru red from the St-Émilion district that managed to turn out impressive results from the tough 2007 growing season. Expect a medium-full body and good concentration, with hints of plum and tobacco and spicy finish. Medium-rare beef or lamb would suit it well, though it could improve with up to three years in the cellar.
La Castellina Chianti Classico 2007 (Italy)
SCORE: 90 PRICE: $18.95
Medium-bodied and bone-dry, this red exhibits textbook flavours of a superior Chianti at a reasonable price. The cherry core finds accents in notes of earth, a sensation of saltiness and grip of fine tannins. The match: pasta with Bolognese sauce.
CedarCreek Riesling 2010 (British Columbia)
SCORE: 90 PRICE: $17.90
A hint of delectable sweetness adds to the balance in this delicious white, which feels alive with a tickle of acidity running through flavours of green apple and lime. It would match a host of dishes served al fresco, from salads to fish to grilled pork. Available at stores in B.C. and Alberta and direct from the winery through www.cedarcreek.bc.ca.
Santo Santorini Assyrtiko 2010 (Greece)
SCORE: 90 PRICE: $16.95
The island of Santorini produces gloriously crisp whites from its signature assyrtiko grape. Medium bodied and silky, this one shows ample fruit ripeness, juicy acidity and a hint of mineral. Its substantial 14-per-cent alcohol comes through ever-so-slightly in a medicinal way, but that's a minor quibble. Try it with grilled shellfish.
Tabali Reserva Especial Syrah 2008 (Chile)
SCORE: 89 PRICE: $19.95
Sweet, smoky plum and a chocolate are carried on an opulent, concentrated frame, lifted by a Rhône-like cracked-pepper essence on the dry finish. Grilled or braised meats, including venison, would do it proud.
L.A. Cetto Petite Sirah 2008 (Mexico)
SCORE: 88 PRICE: $11.95
Mexico's big producer, L.A. Cetto, has many fans in this market, and here's one reason. Smooth and subtly sweet, this 14.5-per-cent-alcohol red delivers a big, chewy mouthful, as one would expect from a petite sirah. Berries and chocolate are set against a savoury backdrop in this big bargain. Perfect for barbecued ribs.
La Cappuccina Soave 2010 (Italy)
SCORE: 88 PRICE: $13.95
Made from organically grown grapes, here's a crisp, flavourful white to defy Soave's old reputation for humdrum leanness. Light medium-bodied, it shows a chewy, relatively dense core hinting at lemon and pear, with a subtle floral overtone. Pair it with grilled fish.
Tenuta S. Anna Extra Dry Prosecco (Italy)
SCORE: 88 PRICE: $15.95
Elegant bubbles for the price. Pronounced apple and citrus flavours are lifted by vigorous effervescence and crisp acidity.
Featherstone Sauvignon Blanc 2010 (Niagara)
SCORE: 87 PRICE: $19.95
It's easy to overlook Niagara sauvignon blanc with all the fine rieslings and chardonnays stealing the white-wine limelight. This one's worth a detour. Round and more fruity than herbaceous, it has good depth of flavour, with grapefruit and peach leading the way and a dry, not-too-racy finish. Try it with spicy prawns or herb-adorned freshwater fish on the grill.