The Tax on Wine
The Tax on Wine: Why is wine in Britain so expensive compared to most of Europe?
The tax/excise duty on table wine has gone up by 57% since 2008. Since I joined the Wine Trade in 1975, the words “Duty harmonisation” have been omnipresent, but sadly remain omnidistant!
The UK tax, including excise duty and VAT, works out at £2.46 (€3.20) per 75cl. Only Ireland has a higher tax - €3.92. In most of the rest of Europe it’s less than 4p a bottle! According to the UK Wine and Spirit Trade Association (WSTA), the UK pays nearly 70%
of all wine duties across the whole of Europe.
Take an inexpensive bottle costing £1.05 at source, add 13p for shipping, 10p distribution and then add £2.05 duty. The sub total is £3.33. Add vat at 20% and a 20% retail margin and you arrive at a shelf price of £5.00. It means that a full 58% is duty and VAT and that just 10% is the actual wine in the bottle. £4.88 is the average price of a bottle of wine sold in a Supermarket. 88% of all wine imported into the UK comes in via the Supermarkets and Cash and Carries.
The moral of this story is that you get more for your money if you spend £8.00, but the £2 worth of liquid is still less than the UK duty. It seems absurd that the duty on a cheap wine costing £1.00 at source is the same as the duty of a wine that could cost £1,000 per bottle at source.
So will Duty Harmonisation ever happen? I predict there would be another revolution in France (and Spain and Italy) if duty was increased to anywhere near the UK figure. I doubt that David Cameron has this high on his agenda when talking about reforms for the UK! Just bear it in mind that you should get a better quality bottle of wine if you pay that little bit more.
Next month we’ll look at local English wines as requested by James Stewart.
In the meantime enjoy your Christmas drinks. In vino veritas; moderatio in omnibus!
Tracy Claridge TLClaridge@TLClaridge.co.uk