Secondary Market Locked and Loaded

(This post has little to do with Maryland or Virginia. -ed)

Production is down at Ye Olde Screaming Eagle Winery, and that can only mean one thing: prices are up. A 50% rise over last year is expected so those on the mailing list are going to fork up $750 per bottle for their allocation.

Anyone who follows this stuff knows that Screaming Eagles fetch far more than $750 on the secondary market so the bottles remain one of the best slam-dunk arbitrage opportunities involving wine. Some deride this, thinking that wine is somehow made to be above capitalism. But, as long as release price continue to rise toward market rates, what’s he problem with unloading bottles that double in value the minute you receive them?

You have the purists that shed tears into their Chardonnay when seeing 50% vintage-over-vintage price hikes, arguing that wine is art and art is over there, on the pedestal, not subject to market influences and hype.  I suspect this is also rooted in the fact that they can’t afford a bottle, and feel this is unfair.

Across the tasting room sit the greedy capitalists who shrug and say that Screaming Eagle is like anything else, and when demand is so overwhelming, prices should rise (see also: Oil).   These people often drop off the mailing list when prices go past what the wine is worth to them, and they don’t have many regrets about doing it.

The whole system is a lot like tickets to sporting events.  Maryland basketball games are constantly sold out and buying the tickets second hand means you’re going to ring up a 50% premium.  If ticket prices rise to meet demand, it means two things: that they’ll have to adjust ticket prices in good times and in bad and that fans will go absolutely nuts.
Regardless, there will continue to be lots of flipping of Screaming Eagle, SQN, and all the other swanky labels as long as there isn’t a microchip in our wine that will allow the wineries to go after flippers.  Until then, capitalism trudges on.