Wine: Be sure to invest in your taste buds

It's spring, one of my favourite times of year, as the gloom of winter is behind us, the days are growing longer and the sap is rising - but then, so are the taxes.
By The Newsroom
Published 30th Mar 2017, 06:00 BST
Updated 8th Apr 2017, 21:17 BST
When it comes to wine, you should be spending more for a better return on your investmentWhen it comes to wine, you should be spending more for a better return on your investment
When it comes to wine, you should be spending more for a better return on your investment

The Budget has been announced recently and each year, we at Le Bon Vin and other retailers, worry how the chancellor will attack our businesses with ever-increasing excise duty hikes. It makes life as a wine merchant increasingly hard.

This year it’s a significant rise - 9p on a standard bottle of wine and 10p for sparkling, never mind a whopping 36p on spirits! It’s worth noting that in my homeland, France, consumers pay just 6p in duty on an average bottle of sparkling wine and three pence paid on still wine.

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But it’s not all doom and gloom as, while it’s going to cost a little more for your bottle, there is a way to beat the taxman and sip on superior wine for your money.

At Le Bon Vin, I often tell customers that the value for money in a £10 bottle of wine is significantly higher than a £5 bottle of wine, even though you’ll be spending £5 more and here’s why:

Duty is now up to £2.16 on still wines (that are between 5.5-15 per cent ABV) add on the VAT at 20 per cent and your £4.99 bottle has a disproportionate total of £3 of tax. This leaves just £2 for the retailer and winemaker to make a fair profit. Say the retailer requires a reasonable margin, then the remainder of 75p must cover costs of not only the wine, but the bottle, the label, packaging, transportation and wholesale profits. Luckily, at Le Bon Vin, we cut out the middleman and import most of our wine, so the money we save is passed on to our customers where possible.

So, after all these costs we find that the actual value of the wine is somewhere in the region of 5p.

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Yet, if you spend a little more, for example £6.99, then the winemaker has £1.91 to play with, while £7.99 gives them £2.50. At £10 the difference is even more pronounced with the winemaker having £3.66 and, if you splash out on a £15 bottle, the winemaker will have a whopping £6.58 to tantalise your taste buds. That is a humongous 900 per cent increase on the winemaker’s share in a £5 bottle of plonk.

Maybe it’s time to consider that what we drink is as important as what we eat, as who would savour meat or fish that cost just 5p? Instead you might suspect that it is poor quality and not so very good for you. So, it’s well worth spending a little more on your wine so you will get a much better return on your investment for your taste buds. A votre santé!