> You also need to factor in the time value of money: if the winemaker sells you a 2022 release in 2022, they get paid immediately.
This is right, I forgot about this: at 5% interest rates, 5 years of storage is actually 25% of the original price, which is probably substantial factor.
> Also factor in temperature and humidity controlled storage (a kitchen fridge will not do),
My kitchen fridge example was only meant to provide an estimate for the cost. Controlling humidity upwards is not expensive at all, it’s even cheaper in fact than controlling temperature.
> insurance against disasters, backup power generation, and so on.
These are extremely cheap at scale. You don’t really need backup power generation, the wine won’t spoil from few hours or even days of inappropriate temperature.
> If you think aged wines are overpriced, it is easy to cut out the middleman and age it yourself — so my guess is that the market is reasonably efficient.
My point was rather that the mere cost of storage is not the main part of the premium. Capital cost is probably significantly higher, but what is probably even higher still is speculation premium: not all wine vintages are appreciating equally, and if you just buy random wines, they will likely won’t appreciate all equally over time.
This is right, I forgot about this: at 5% interest rates, 5 years of storage is actually 25% of the original price, which is probably substantial factor.
> Also factor in temperature and humidity controlled storage (a kitchen fridge will not do),
My kitchen fridge example was only meant to provide an estimate for the cost. Controlling humidity upwards is not expensive at all, it’s even cheaper in fact than controlling temperature.
> insurance against disasters, backup power generation, and so on.
These are extremely cheap at scale. You don’t really need backup power generation, the wine won’t spoil from few hours or even days of inappropriate temperature.
> If you think aged wines are overpriced, it is easy to cut out the middleman and age it yourself — so my guess is that the market is reasonably efficient.
My point was rather that the mere cost of storage is not the main part of the premium. Capital cost is probably significantly higher, but what is probably even higher still is speculation premium: not all wine vintages are appreciating equally, and if you just buy random wines, they will likely won’t appreciate all equally over time.