When going to your local supermarket to buy a bottle of wine, you already know how much you will spend on it. But from that budget, do you know the actual value of wine you will really get once you’ve taken off all non-wine parts like packaging, merchant margin, Excise Duty or VAT?
One could say that the more you spend the better your wine will be… We would say that this is almost true: If you decide to go for a “cheap” wine around £5-£6, most of your money will go on Excise duty and VAT so the value of the wine that’s inside the bottle represents almost nothing... It’s is sad but true and this is due mainly to the Excise Duty being a fixed cost, whatever the price of the wine. And it’s been increased once again in the latest budget revision from £2.16 to £2.23 per bottle!
You can see on our infographic that the wine value in a £5-bottle represents only £0.30 - around 6% of the price - so the second less important part after logistic costs. Now when you buy a £20-bottle, the value of the wine will increase significantly to £7.03, which is about 35% of the total price!
So, if you still think buying cheap wine is worth it, at least now you know where your money goes… and this is clearly not to the winemaker!