I just caught the end of a radio interview the other day where Peter Allen of Radio 5 was speaking to Guy Woodward, the Editor of Decanter magazine. The discussion was around tax and duty on wine in the UK, it sounded quite interesting and prompted me to do some research.
Did you know that for every bottle of wine we buy, the duty is £1.81. You then have to pay VAT on that duty which brings the figure up to £2.17 per bottle.Then you have VAT on the wine itself. When you consider that the average bottle of wine bought in the UK costs £4.50 that’s over a 50% tax rate.
Let’s now look at the other costs, shipping, marketing, storage and a some profit for all the people in the chain, the producer is only left with about £0.90 per bottle. So you are paying twice as much in tax as the producer receives for making the wine at this price point.
So, Peter Allen asks Guy Woodward what the optimum price is for a bottle of wine. Woodward replies about £9.00 or £10.00 pounds. At that price the producer is receiving about £4.00 per bottle, four times as much as they would receive for a £5.00 bottle at retail.
This is all now making sense to me. I think we can all agree that £5.00 wines tend to be a bit formulaic but increasing your spend towards £10.00 does pay dividends in taste and variety. The wines that I have drunk which have headed towards £20.00, on the whole have been disappointing. Whether I was expecting too much, I don’t know.
So £10.00 is the new £20.00. I’ll drink to that !
Ps Wine duty in France is £0.03 per bottle