A recent article in the press outlined the fact that the £10 mark was a good safe price point to pay for a bottle of wine due to the ratio between the production costs and the actual cost of the wine itself, is at the ‘good value for money’ point. When you actually chip away at the various costs involved with wine production its certainly safe to say that on the lower end of the market there is not a lot left for the actual wine value, therefore reducing also the quality of the wine.
So let’s look at where the costs lie on a bottle costing £5.00.
The heaviest cost involved are the taxes. These are made up of two main areas, duty and VAT. The duty rate on a bottle of wine up to 15% ABV is £2.16. This means that wine from anywhere in the world entering the UK, the government slap this amount on. Then we have the packaging costs which account for around 40p, logistics amounts to around 20p and then supplier’s margin accounts for approximately £1.08. That comes to £3.84. Then we have to add VAT making the cost price £4.61. This then leaves 39p for the actual value of the wine itself and therefore a far inferior quality product.
If we jump up in price to £9.00 a bottle, then it is a different story.
Logistics and packaging remain the same at 60p. Duty is the same at £2.16, supplier’s margin is approximately £2.25 bringing the cost to £5.01. Adding the VAT makes it £6.01 leaving £2.99 for the value of the wine. So by spending an extra £4 on the bottle, the value and quality of the wine is just over 7 times better than a £5 bottle. The more you spend the higher the actual wine value is, and it rises at a faster rate then what you spend, giving you much better value for money. Now, I always say the wine is a good wine if you enjoy it, no matter what you spend but the above costings are worth thinking about if you really enjoy your wine. The term ‘false economy’ springs to mind.
Below are a few examples of some great wines at the £9.00 area and great for summer drinking.
Monrouby Grenache Blanc – Languedoc £8.99
Full of tropical fruit flavours, bursting with peach and citrus characters.
Soave Classico Monteforte – Italy £8.49
We were drinking buckets of this 30 odd years ago and is making a come back. Clean and fresh with apple fruit jumping out of the glass and smacking you on the lips.
Domaine de St Rose, Les Deux Cesars Rosé – Languedoc £8.99
Summer and Rose go together like the moon and stars!!! Dry and fresh with hints of strawberry fruit shouting out your name from inside the glass!
Don’t forget you can come and taste a few cheeky wines every weekend at VIN Wine Merchants 6 Queen St Emsworth, for FREE!.