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Friday, 02 April 2010 15:38

The real cost of wine: what percentage of the cost is actually paying for the wine?

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).

According to the Wine & Spirit Trade Association, the average cost of a bottle of wine is £4.32. Of this, £2.34 is paid to the UK Government in duty and VAT. That leaves £1.98 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 £4.29 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.

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.