The way grapes are grown (viticulture) and how they are subsequently made into wine (vinification) are the two main factors that effect quality in wine.
Yield is very important, this is how many grapes are grown per hectare of land; it is quoted in hectolitres per hectare e.g. 50 hl/ha. The fewer grape bunches per vine the more intense their flavour will be. At the very best vineyards yields can be as low as 30hl/ha, e.g. top quality Burgundy, as opposed to around 100hl/ha for non-quality wines, e.g. Liebfraumilch.
There are many treatments used to make wine and some are very harsh and can spoil or taint the flavour. Mostly these are used for convenience when processing enormous quantities of lesser quality wines.
It is very difficult to assess the quality of wine just by reading the label. Quality is assessed best by tasting. Quite often you won't be able to taste a wine before buying, but information is available on wine labels to help you decide, although you will need a certain amount of knowledge about producers and vintages. Of course any good wine merchant can offer you this advice.
There are quality classification systems within the EU that give some guidance; a Country Wine (Vin de Pays) ought to be better quality than Table Wine (Vin de Table) because of the wine production laws in place. So as a general rule of thumb the higher up the quality scale the better the wine should be. As with any industry, there are those who take pride in their product and produce outstanding wine within the quality category, and those who do just enough to remain within its boundaries, hence there will always be variation.
Wines produced outside of Europe are not governed as much, making it harder for the consumer to identify the better wines. Market forces, i.e. the price is often the only guide, and by establishing whether the wine producer has a good reputation. Quite often wines made from single-vineyard grapes are good quality - some vineyards provide perfect growing conditions and so the fruit quality is excellent e.g. Pfeifer Vineyard owned by King Estate makes outstanding Pinot Noir wine.
Old vines usually produce fewer bunches, but they are generally of higher quality. Consequently wines which state that they are made from "old-vines", vieilles vignes, are usually better than average quality.
European Table And Quality Wine Categories
Price is only an indication of quality when similar wines are being compared, e.g. two bottles of claret from the same vintage. Price also reflects age, rarity and whether it comes from a particularly famous producer. Growers with excellent reputations are able to command higher prices for their wines. This is not to say that an unknown, small producer is not making wines of similar quality at a fraction of the price.
Only use price as an indicator of quality when comparing like with like. Price cannot compete with sound wine knowledge; the more you know about wine and wine producers, the better you will be at selecting good wine.
There is no real answer to this question. Value is the relationship between quality and price. If a dry red wine tastes as good as most £25 bottles of dry red wine, but costs only £15 then it is a good value wine. If a wines costs £2.99 but is so unpleasant you can't drink it then value is poor.
Quality wines cost more to make than non-quality wines; the growing and winemaking methods are more expensive and thus you won't find a quality wine at a very low price. However a bad, but greedy, producer may charge more than his wine is truly worth. (Fortunately reputable merchants protect consumers by not buying these wines.)
Wine is like any other commodity; production costs, rarity and prestige are the factors that dictate the final price.
Winemakers can choose to produce their wines cheaply or expensively. They might make their wine using low-yields rather than bigger volume high-yields to ensure the use of fuller flavoured grapes. They might harvest by hand (high labour costs) rather than by machine to be more selective. They could make their wine in concrete vats or (very expensive) new oak barrels. All these additional costs will be recovered in the selling price of the wine. This is why a wine from a quality producer will always be more expensive than a bulk-production wine.
Many quality wines are made to mature over a long period of time before finally reaching their best. As time passes by, and more and more bottles are drunk up, a wine will become increasingly rare. Often a bottle of wine will be bought and sold many times, pushing its price higher and higher. Then there are the astonishingly good wines made in tiny quantities each year, from the outset these wines are rare and of course costly.
There is really no difference between a rare quality wine and a limited edition luxury car, both are desirable commodities and if they are your passion you will be prepared to pay for their rarity and exclusivity and believe they are worth the price paid.