Here in Madrid for the Holidays. Been to quite a few restaurants, tapas and more elegant. Spanish wine is dirt cheap here. Most Tapas restaurants charge 2€ per glass and the wines are quite decent including Rioja and Ribera del Duero. Had a great bottle of Albarino last night for all of 13€ (Say $18 or so). My wife and I just had a big lunch of beef tail soup, squid, and 4 glasses of wine. Total price was all of $36 USD.
I may need to move here…
I thought in general that restaurant prices were very good too when I was in Barcelona last year. Some of the very good meals I had would have cost three times as much in NYC.
Their economy has been in shambles for some time. So that has something to do with it. And the fact that wine is part of every meal. Here most restaurants look at wine as a way to extract as much money as possible from you with as little effort as possible. Also less fees and taxes.
Try La Venencia sherry bar (tapas and Hidalgo sherry from cask), a fun old place, very informal. There is also a wild mushroom resto: Cisne Azul, just off Chueca square that’s small but interesting.
Why is it cheap? Several reasons:
No import fees, no customs duties and tax, no shipping costs, and a lot of the cheap wine in those bars is good enough, but nothing exciting. Context matters. I’ve found the same thing to be true in most countries I’ve visited.
That said, keep your eyes open. You may find some real gems stashed in some cafe that have been around for a while. Last time I was in Rioja I stumbled across some older wines and told the owner I was happy to find them because they were hard to find in the US. “Here too,” he replied. So I bought them all.
The by the glass stuff is often not bottled, of bulk bottled, saving even more than Greg mentioned.
Two Euros for Lopez Cubillo by the glass in Haro last summer. I think another reason is that wine is a traditional and important part of Spanish culture unlike the “tool of satan” or foo-foo luxury item rep it has here in the US. ![[snort.gif]](/uploads/db3686/original/2X/b/bdc3944606213c4dca6c1169cf0a166c8bc4f8c9.gif "snort.gif"){kind=small}
They love food and wine. My wife and I would each order a carafe or we would get a look of “are you sick or something!” Dinner and wine for two would be under £50. Couple hours later we could stroll back to the hotel. I love that country! Italy is not half bad either! ![[drinkers.gif]](/uploads/db3686/original/2X/8/82916bed5ad74ac8470bc04089d9758b0c80c9fa.gif "drinkers"){kind=small}
Because they have riots when the price of base wine is more than that of mineral water?
Add to all of that the absence of usurious wine markups not only in Spain, but in all of Europe, possibly in all the world outside of the U.S.!
The wine has to be cheap to make up for how bad the food is. 
Aside from how cheap the wine by the glass is, it usually comes with FREE food:
If Spain is ANYTHING like Italy, there are a lot MORE fees and taxes. Whether they get collected and paid is, of course, another matter.
Because they produce a shitload of wine. I think they have the largest amount of land dedicated to vineyards in the world with respect to their land size.
Correct in Granada and Almeria. The rest of Spain for the most part now you pay for the Tapas too. But for sure in Almeria and in Granada, they are still included and the quality of the wine even though it is cheap wine has improved drastically in the past few years.
Re: why is wine so cheap in Spain? Everybody has hit on the main points already, but there are other factor in there like the prestige factor, the fact that many vineyards are owned by families who have had possession of the land for decades and don’t have to factor in mortgage costs.
We planted our vineyards (close to 60 acres now) on land that Juan inherited from his father, then we cleared the land, made a huge reservoir, built the winery and put in all the installation. We were starting essentially new, whereas many huge producers in LaMancha, Cuidad Real, and all over the central and more developed wine making regions (Rioja, Ribera, Toro & etc.) have had the whole project developed long before the Euro came in and prices went up. But if you consider the costs on taxes, mortgage, wages etc. in say for example in the US west coast, the difference in overhead is striking.
The Spanish palate is evolving though. In the past you would go to a restaurant and wine was wine, now even in the villages people are more selective and readily ask for a wine list.
Good point re lack of mortgage costs. That’s what make Napa, for ex, so expensive (their QPR is far below Spain’s, IMO).
I attempted a recent thread here(albeit in a convoluted way) to try to understand why with the abundance of old vine fruit in Spain, why wines that garnered more respect and higher price tags were not being made with what I would think to be a very valuable commodity. Any ideas?
IMO, high price tags follow mostly from reputation, and that isn’t so easy to establish. In Spain, in particular, Nola pointed out (I forget where) that there is little spirit of cooperation, ie “every winery for itself,” so it’s hard to apply the marketing ploys that might help boost reputation.
Just had another fantastic bottle of Albarino at 18 Euro with total dinner tab at 55 Euro. I may never leave . . .
What, if any, part do co-ops play in this discussion?