Home News & Articles The real cost of wine - an update
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Wednesday, 25 August 2010 09:40
 

New figures reveal increase in average price paid per bottle - but most still goes to the Government

 

Amazingly, in the UK, over 50% of the cost of the average bottle of wine goes to the Government (with nearly £15bn paid in excise duty and VAT from the UK alcoholic drinks industry in 2007/08).

Latest figures (Nielsen) reveal that the average price paid for a bottle of wine is £4.37. Of this, £2.34 is paid to the UK Government in duty and VAT. That leaves £2.03 to cover the wine, bottle, label, cork, transportation of the wine, the shop’s margin, and all other costs that go into making and selling you a bottle of wine.

Alarmingly, it is estimated that a £4.37 bottle of wine probably contains less that 40p of wine.

But, there is some good news. Duty (but not VAT) is a fixed amount. So, if you increase your spend, you are getting more wine for your money: the more you spend, the higher proportion of your money is going into the wine. The experts seem to agree that true value is to be found between the £6 and £10 range. However, wine under £5 accounts for 79% of the UK market accroding to analyst Stewart Blunt of Nielsen.

But, beware of special offers. For example, for a supermarket to advertise a wine as discounted, the wine must only have been on sale at full price in one store for 28 days.

According to Nielsen, only New Zealand saw the average bottle price fall (from £6.39 to £6) - apparently due to "price discounting in UK multiples". It is suspected that the smaller 2010 vintage wll reverse this trend. However, despite this fall, New Zealand remains the top country in terms of price paid per bottle; with France coming in second at £5.03 (up from £4.73 last year).