Is £5 a bottle really a good deal?

How much should you pay for your wine? It’s a personal choice, but before you hand over your cash its worth knowing how much of your money is actually buying the stuff that you swallow.

Wine is an excellent revenue stream for the Government. Every bottle brought into the UK incurs a duty of £2.05 (correct as of 2014) plus VAT on top when it is sold to the public. That all adds up to around £3 billion a year.

If you are tempted to buy that bottle of wine you saw in the supermarket for a fiver, consider this:

  • the supermarket takes its margin, around 30% thats £1.50
  • the Government gets £2.88, thats 83 pence for VAT and £2.05 for Duty

this leaves around 60 pence of your £5 is for the wine itself.

That 60 pence has to pay for that wine’s ingredients, cultivation, harvesting, manufacture, bottling and shipping to the UK.

Below is a comparison showing what happens when you spend £5 at the supermarket or a bit more.

Cost

The good news is that the costs to the producer are mostly fixed. So if you decide to spend a bit more your chances of a good quality product increase dramatically.

If your bottle of wine costs you £10, around £3.30 of it is for that wine to be transformed from a grape to a bottled product on the shelf. If you spend £15 then this leaps to around £6.

Whether or not a supermarket wine is actually worth £5 in the first place is discussed in this fascinating article by Oz Clarke, featured on the BBC’s Watchdog.

How much would you pay for wine at the supermarket? Would you buy it on a half price deal? Comment or get in touch.

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