Wine: The price of perfection

To reach Corney & Barrow's city offices for their tasting of the 2005 vintage burgundies from Burgundy's Domaine de la Romanée-Conti (DRC), you have to walk past a city watering hole called The Mint. Minted is what you need to be to lay your hands on just one bottle of DRC, which was on the Corney list for £6,795 for a case of six. Even though the tasting took place only last month, your chances now of buying a bottle of Romanée-Conti, or any of its five less expensive siblings, are almost as remote as flying in a microlite to Mars. Corney was oversubscribed, four times for DRC's La Tâche and eight times for Romanée-Conti itself, and they only sell, ostensibly, to customers who claim that that they're not buying to sell as an investment.

From its 25 hectares of pinot noir, 7,232 cases of grand cru red burgundy were made in 2005 and just 285 cases of its white grand cru, Le Montrachet. Limited stock, global demand and a track record stretching back to before the French Revolution, have ensured that the DRC is the ultimate collector's icon wine. How many customers do Corney have in this country for DRC? "Lots," answers Corney's UK ambassador Adam Brett-Smith, pre-empting your next question with a you-must-be-joking sort of laugh. "Next I suppose you're going to ask how much margin we make?" Instead, I ask Albert de Villaine, urbane, serious co-owner with Henri-Frédéric Roch of DRC, how he sets the price. "We look at the price set for previous vintages, the market and the reputation of the vintage, and we apply our own appreciation of the wines."

While the DRC was setting its price, Alain-Dominique Perrin, the owner of Château Lagrézette in Cahors, was raising the question of the link, or rather the lack of one, between the cost of production of a fine wine and its price. He called top Bordeaux châteaux immoral for aiming to charge €500 (£385) a bottle for the new 2007 vintage when it costs only around €12, or £9, a bottle to produce. As executive administrator of Richemont, which owns Cartier, Montblanc, Piaget watches and Dunhill, he should know about the price of luxury. According to M. Perrin, consumers are being asked to pay about 80 times cost price for top Bordeaux when the most expected in the luxury industry is 17 times the cost of production.

But is it always possible to make a direct link between cost of production and price? I'm not sure how much more it costs to produce a hand-beaded Valentino gown than a Primark T-shirt, but the price of the Valentino is about the value of a luxury brand, defined not just by quality, but status, desirability and scarcity. In the case of DRC, perhaps the super-rich who can afford to will drink it, albeit with the label prominently displayed. Yet the status of a luxury icon, and a very saleable one at that, can transcend the bewildering disparity between the cost of production and price. Last year, a case of 1990 Romanée-Conti sold in the US for $252,000 and a case of the 1985 vintage made $240,000. Like it or not, investing in wine, a market estimated at around £1bn, has become big business with the credit crunch fuelling a growing number of wine funds offering attractive returns to investors.

De Villaine's concern about DRC's investment value appears genuine. So much so that he's on a mission to try to prevent it from being traded as a pure investment. The specification in the Corney & Barrow opening offer says "the domaine's focus is on private customers and as a consumer rather than a speculator", stating "should you wish to sell the wine in the future, do please offer Corney & Barrow first refusal as this will ensure the integrity of secondary market distribution". So what are the chances of the urbane De Villaine enforcing it? Sadly, about the same as those of Canute holding back the incoming tide.