The Tipping Point
March 26th 2010, by Gavin
Duty on wine in the UK has gone up nearly 30% in three years (to £2 a bottle from this weekend), compared to 15% over the previous seven. Only Finland, Sweden, Eire and the UK have duty over 50p a bottle, and there’s no duty at all in Spain, Italy, Germany, Austria, Portugal and 10 ten other EU countries. France, with just 3p duty, is not far away – literally.
Will Middle England have to put up with being fleeced by the Government for wine at home for much longer? Watch this space…
Feel free to comment, as we’d like some help in shaping our cunning plan.
5 comments
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George Wroblewski replied:
It is just so easy for the government to increase duty on alcohol (binge drinking, liver disease, etc. ) that I believe any change in government will not make the slightest bit of difference. We can go on strike and stop drinking for a year! Somewhow I do not think that would last long!!
March 27th, 2010 at 11:20 am. Permalink.
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Christopher Godber replied:
Why not put the UK Tax take on the wine as an item on your labels.
March 27th, 2010 at 12:21 pm. Permalink.
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Gavin replied:
Christopher, thanks for the original idea. Keeping up with the label regulations for each country is bad enough as it is without adding the UK tax amount. This year, we’re sporting the obligatory no-go pregnant lady logo (although Angela coped well enough with our four). Meanwhile, our Swiss importer refused to have it on there, so I took it off for him, with pleasure.
I digress. The problem with adding the UK tax take on each bottle, other than it looking a bit obsessive, is that the rate has gone up more often than the number of vintages we make and would soon be out of date.
The UK duty was £1.33 plus Vat in March 2007, £1.46 plus Vat in March 2008, up to £1.57 plus Vat in Dec 2008 (Vat down to 15%), then back up to £1.61 in 2009 and then £1.69 from now (and Vat is back at 17.5% as from 1 January). On a Bauduc bottle costing £7.99, UK duty and Vat is £2.88, and transport and home delivery is about £1. It costs about £3 to make, even without hail damage (the minimum wage in France is much higher than UK, and we pay over the odds).Meanwhile, the exchange rate has gone from 1.48 euros to the £ in 2007 to €1.10 now.
Truly a labour of love or, in reality, just plain bonkers.
March 27th, 2010 at 1:15 pm. Permalink.
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Mark Lethem replied:
I live in Catalunya on the edge of Penedes and close to Priorat – my experience is that decent local wines are as expensive here if not more expensive as similar wines in the UK and very little choice on offer other than local stuff – so on balance I think UK wine drinkers don´t get such a bad deal – and if taxes have to be paid then why not tax wine……….Nothing like a robust market to keep prices down!
March 27th, 2010 at 2:03 pm. Permalink.
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Gavin replied:
Thanks for the comment, Mark. Perhaps those clever growers in Priorat near you have found a willing export market as their wines are in vogue overseas, and as the wines are not in great supply they can ask a decent price for them. That’s not our experience here, although the most expensive place to buy St-Emilion is in St-Emilion.
I used to think that UK drinkers got a great deal, thanks to the efforts of intrepid wine merchants and an open mind when it comes to a wine’s origins. But the level of duty, as well as the exchange rate, now means that UK drinkers do not get a good deal.
Wine merchant friends used to tell me that, three years ago, they’d take the cost price of a wine in euros, say €3.50 (that’s after a trade discount of course), and double it to arrive at the retail price in the UK, ie £7. No problem. Today, you’d treble it – to over £10. A €3.50 wine for over a tenner? That’s not a value proposition. The £1.69 duty – £1.69 more than the duty rate in Spain – usually increases the price by £2.50, plus all the Vat, as the merchant has to add a margin to the overall cost price (irrespective of exchange rate). And as most people that we talk to are still drinking wine that costs from £5 to £9, that’s a big slice when you add the Vat as well. Typically, a wine costing £7 UK retail costs less than £2 at source, with the Government taking nearly £3 in Vat and duty.March 28th, 2010 at 6:23 pm. Permalink.