Darling Goes over the Top
June 7th 2008, by Gavin
By our man in the trenches
Times are tough for the UK wine trade. The pound has slumped against the euro, the cost of wine at source and fuel prices have shot up, and consumers face the credit crunch.
If that wasn’t enough, the anti-alcohol lobby is winning the media battle, with middle-class binge-drinkers being portrayed as a drain on the nation’s resources. So the same government that brought in 24-hour drinking (for health reasons?) softened the way for the assault on responsible wine lovers.
Britain now boasts the highest rate of duty on wine in Europe. The Chancellor of the Exchequer slapped a record 14p on a bottle of wine in the Spring budget and pledged to increase duty above the rate of inflation over the next four years.
Duty on a bottle of wine is now nearly £1.50, plus VAT on the duty as well as the wine, while there is no duty at all in Italy, Spain, Portugal, Austria and Germany, while France fleeces its citoyens for all of 2p a bottle. And yet we manage to remain sober – well, most of the time.
Captain Darling even claimed that wine drinkers are better off under this Government: ”Alchohol has become more affordable. In 1997, the average bottle of wine bought in a supermarket was £4.45 in today’s prices. If you go into a supermarket today, the average bottle of wine will cost about £4.00.”
Perhaps, but what he didn’t say was that the government has trousered 37p more per bottle in duty in that time, before the new rate came into being. Producers have been forced to cut costs, and two thirds of wine sold in Britain today is on ‘special offer’.
50% tax on an average bottle
On a £4.20 bottle on sale in the UK, which is the average price paid for a bottle of wine, £2.10 goes on duty and VAT, then there’s shipping, storage and distribution, plus the agent and the retailer’s margin. After the bottle, cork, capsule, label and packaging (we spend 50p on all these) that leaves rod all for the wine inside the bottle.
Bauduc in Restaurant Price Shock – Telegraph
May 25th 2008, by Gavin
Yesterday I took a call from Rupert, the general manager for Rick Stein’s group of establishments in Padstow, Cornwall, saying that Rick had been asked to comment by the Telegraph about the high price of wine in restaurants. Apparently, an investigation by the Daily Telegraph had revealed that both Rick Stein and Gordon Ramsay were charging a lot more for a bottle of Chateau Bauduc than they were paying for it. And?
It then dawned on me that I had been set up by a chap on the phone, a few weeks back, who was trying to chisel a good price out of me for a new venture. The person ‘posing as a potential buyer’ in the article – he said he was called David – was going to start up a new establishment, and it was clear that he didn’t have a clue what he was talking about. (Even the calculations in the article don’t add up.) I felt rather sorry for him when I wished him good luck at the end of the call. As stings go, it was hardly Sven and the fake sheikh.
I said to Rupert that, on the contrary, our wine was too cheap in the restaurant. After all, top restaurants need to make a 66% gross margin. The refurbishment of The Seafood Restaurant earlier this year cost a seven figure sum which didn’t start with the number 1. £19 for a bottle there for a wine that’s sold by the vineyard for £8? ‘No wonder it’s so popular in the restaurant’, I said. Victoria Moore, the Guardian’s wine correspondent, cited Château Bauduc Bordeaux blanc as being good value for £18.50 at The Seafood more than three years ago. More to the point, try booking a table.