While not quite as bad as diamonds, a lot of what goes into wine pricing seems to be largely bullshit as well:

Numerous experiments have shown that people will enjoy a table wine and a fine wine equally if they believe that they are both fine wine. Knowing that a wine is supposed to be good does literally make it taste better. The drinkers could be lying about enjoying the “bad” wine due to social pressure. However, an experiment involving a Stanford wine tasting group, a group of identical wines presented under fake price tags from $5 to $90, and a fMRI machine measuring activity in areas of the brain correlated with pleasure suggests otherwise. Drinking the same wine with a higher price tag did increase pleasure.

Also, this is a great quote:

As of 2003, Bronco processed 300,000 tons of grapes to make 20 million cases of wine, of which a quarter are Charles Shaw wines. Asked how he sells wine for the same price as a bottle of water, Franzia responded, ““They’re overcharging for the water. Don’t you get it?”