How wine distribution margins work

The Place de Bordeaux

A classified growth sells to a négociant through a courtier (broker). The courtier takes about 2%; the négociant takes 10–20% depending on the wine's desirability — for the first growths in a hot campaign, less; for an unloved fifth growth, more. The négociant sells to importers and merchants worldwide, who add their own margin. The château sees only its ex-château release price; everything above it belongs to the chain, which is why a château cares so much about where the secondary market sits relative to its release.

Three tiers in the United States

Post-Prohibition law requires most wine to pass from producer to distributor to retailer. Distributors commonly work on 25–30% gross margin and retailers on 30–50% on their cost, so a $50 winery price is $65–70 to the retailer and $90–105 on the shelf. Restaurants mark up two to three times. Direct-to-consumer sales — mailing lists, tasting rooms, wine clubs — bypass all of it, and are the reason Napa's cult estates can release at $500 and keep $500.

Allocation and the secondary market

Where release prices sit far below market — Burgundy, cult Napa — the largest margin is not a distributor's but the allocation holder's: the difference between the release price and the auction price, captured by whoever had the right to buy. This is the economics of the waiting list.

What it means for value

A collector's 'return' is measured from the price paid, which includes every margin above; a wine bought at retail must appreciate by the retail margin before the buyer is even. It is one reason the gross index return on the benchmarks page is not a return anyone earns.