Category Archives: Tax on wine

The Price of Wine

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wine 5.58£5.58: that’s the average price we in the UK pay for a bottle of wine according to a recent survey.  Doesn’t sound very much, does it?  But, look behind that figure and things become a lot more worrying – both for the producer and for those who want a nice glass of wine without paying too much.

For a start, more than half of that price goes straight to the Government in tax; every bottle of still wine has £2.16 duty added to it, whether it retails at £5 or £500 – so it has a bigger impact on ultra-cheapies – and then there’s VAT, which works out at 93p included in the cost of a £5.58 bottle.  The bottle itself, the label, cork or screwcap and transport costs also need to be accounted for, as does a little marketing; say 65p in all for those.  And don’t forget the retailer who will, typically, take about a quarter of the price – another £1.39 out of the total.  A quick calculation and you’ll realise that that leaves a paltry 45p for the wine itself – and that has to cover the costs of a year’s work in the vineyard plus the winemaking.

The one apparent piece of good news for the producer is that this average retail price has gone up 9p a bottle in the past year.  But, No!  8p of that was a tax rise and at least 4p more can be attributed to the drop in the value of the £ against the dollar and the euro since June 2016.  So, in reality, the producer is actually 3p a bottle worse off than before.

And, if all this isn’t depressing enough, these calculations are based on the average price paid – so half of all wine bought in the UK is cheaper than this.  Just how sustainable is that?

 

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