What's the wine actually worth?

Currently in the UK on a wine selling for £5.99 per bottle £3.26 is actually UK tax - that is a massive 54%!

On a wine retailing for £9.99, £3.92 is UK tax (39%).

However it is considerably more for sparkling wine or for any wine of 15% abv or more, as excise duty goes up from £2.16 per bottle to over £2.77 for sparkling or £2.89 for over 15% (plus vat of course!).

So what is the genuine value of the wine?

Let's look at a bottle of a popular new world wine retailing in the supermarket for £5.99. Here are the costs:

UK VAT £1.00

UX excise duty £2.16

Customs tax £0.10p

Bottle £0.15p

Label, screwcap, outer packaging £0.10p

International transport £0.20p

UK transport £0.20p

Total £3.91. The supermarkets like to work on over 30% on wines so that's about £1.65 margin for them. That basically leaves about 40p to pay for the wine itself and the winery's profits. Supermarket buyers tend to work on a purchase price, bottled and labelled of 35 US cents per bottle, which is probably around 10p for the wine itself. It certainly makes you think what you're putting in your body when you drink this cheap plonk. Would you eat meat or fish which cost just 10 pence? Or would you suspect it wasn't going to be good for you.......?

There is a great free "app" for iphones (UK Wine Tax Calculator) which calculates how much of the wine's price is actually tax - well worth installing!