How much are you paying for your wine?
We were asked on a number of occasions why we don’t serve any wine we can purchase for a fiver in our cocktail parties, as it would generate more profit for us. I thought it would be interesting to show exactly what a bottle of wine costs, and what you get in return as a customer.
The budget each year sees the Chancellor, merrily slap another vicious price rise onto a bottle of wine without anyone seeming to notice (dressing it up as a way of fighting binge drinking, although they are giving green light to late hours trading for pubs and clubs); Which is a bit contradictory, if you ask us. But look more closely and you see how much the Government is actually making from our glass of wine.
So let’s look at the figures and see what it really means in terms of our shelf price of a bottle of wine and who actually is making money.
The duty on a bottle of wine is now a fixed rate of £1.90 for bottle up the value of £10, which is what you are handing to the Government just for the pleasure of purchasing the bottle, without actually enjoying any wine yet. You will then pay 20% VAT on the rest of the price of the wine.
Take your desired £5 bottle of wine from any supermarket, the excise duty and VAT mounts to £2.73
Next there are some fixed costs associated with producing wine, notably bottling, shipping, storage, cork, label, packing, transport etc. This all adds up to roughly 80p per bottle which takes us to a total of £3.53
In all these calculations, I haven’t actually accounted for anyone actually making a living out of the wine and there is the wine maker, the Shipper and the Retailer at least, who all need their percentage.
So you can see that for a five quid bottle of wine,
a) No-one is ever going to make money, except the treasury and
b) The quality of the wine is going to be a tad limited.
Now for your eight pound bottle of wine there is a bit more to feed the families and you can begin to assume that there are some carefully tended grapes.
As prices of wine have continued to rise over coming years the heavy discounting of the supermarkets has made it ever more difficult for independent retailers to compete. Last year saw the folding of Threshers, Wine Rack, Victoria Wine group and more recently we watched the sad demise of Oddbins, one of the more colourful shops which introduced a new era of exciting wine.
The good news is that there is a new breed of independent wine merchants and wine producers who are bringing their expertise and knowledge of niche markets to us. Wine Buffs and Corks Out in Cheshire are examples of these. They are not just supplying a good glass of wine, but also understand what a good glass of wine is. Their ethos is working with companies who have a passion for good products and value for money
So next time you are looking at Wine, think about what you are actually paying for, as for a few pounds more, you could be enjoying that glass a lot more