I mean, the wine itself. Let’s call it the juice. You go to buy some wine, hopefully from us, but we’ll let it slide if you don’t. Where is that money going? There was an old advert for a clothing store when I was growing up in the US. Part of it was ‘An educated consumer is our best customer.’ I think there’s some wisdom to that. It can be helpful to know quite what you are spending money on, wherever you choose to spend it.
Finally, before we dive in, keep in mind these are industry averages, and will change when the exercise and duty regime comes into play in August. And these are for some hypothetical, typical wine, whatever that is. With that:
Let’s say you go into the supermarket for some wine. You aren’t feeling that flush, so you go for a £5.50 bottle. In that case, you’ve just paid more in tax than for anything else. Of that £5.50, £3.15 goes on duty and VAT. There are other expenses – packaging, logistics and margins – what the winemakers and sellers need to keep in business. Once those are subtracted out, you’ve paid a total of £0.21 for the wine itself. Or, in other words, under four percent (!) of your money goes to what you actually drink. That’s not much.
Packaging, logistics and duty are going to be the same no matter how much you spend on a bottle. (Assuming it is coming from the same source, etc.)
If we jump up to the average price people pay in the UK for wine, £6.31, you are now paying £0.70, or about eleven percent, for the juice. Still not very much.
If we continue the analysis, at £10/bottle, the juice is with £2.48, or about a quarter of what you are paying. At £20, where we will end our analysis, it’s £6.67, or a third of the whole cost.
In other words, up to a certain amount, at least, and £20 is high enough to make the point, the more you pay, the more bang for your buck you get. Going from £5.50 to £10, just less than a doubling of cost, the cost of the juice itself is almost twelve times greater. The quality improves substantially.
Of course, there is more than that to choosing a wine, even ignoring individual preferences. You may simply not be able or willing to spend, say, £12 – £15 on a single bottle of wine, except maybe for a special occasion. That’s understandable. It does seem like a lot if you aren’t focused on wine. But then again, compare that to a night down the pub, or takeaway. Does it still look so bad?
In the end, though, it really does come down to drink what you like. At least now you can do it a bit more knowledgeably.
(Credit for the data goes to Bibendum’s Vinomics chart.)
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