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How much does wine really cost?

by | Feb 11, 2021 | Blog

It’s a well known saying that you “get what you pay for”. When it comes to wine this really is true. This may seem quite obvious but when you take into account things such as packaging, VAT and margins, the amount of wine you get for your money goes up with more premium products.

How much does wine duty cost?

The cost of alcohol duty is included in the price that you pay. However, the amount of wine duty doesn’t depend on the price of the item. It is actually dependent on the strength of the alcohol. This means that even with a cheaper bottle of wine, the duty cost is the same as a more expensive bottle. This also applies to beer, cider and spirits. The amount of duty that needs to be paid on wine also depends on whether it is sparkling or still. Let’s look at the average cost of wine duty.

Still Wine (5.5% – 15% ABV)

We’re focusing on this bracket because most of the wines that you buy will most commonly range from 11% – 14%. For wine with an alcohol content of between 5.5% – 15%, the wine duty payable is approximately £2.98 per litre, which works out at around £2.23 for a 75cl bottle of wine.

Putting this into perspective, if you buy a £5 bottle of wine, after the cost of duty is taken off there’s only approximately £2.77 left. This needs to cover the cost of VAT, packaging, logistics, margin, as well as the wine in the bottle.

If we apply the same to a high-quality bottle of wine that costs £10, the amount left after wine duty is £7.77. Because the other outgoings such as packaging and logistics will stay pretty much the same, there is more left in the ‘budget’ so to speak to cover the cost of the wine that you’re buying.

In case this isn’t quite clear, this useful graphic from Bibendum really puts it into perspective how much wine you’re getting when you buy a cheap bottle compared to a premium bottle.

Bibendum Vinonomics Spring 2020 Graphic

Source: Bibendum ‘Vinonomics’

This graphic is based on a ‘typical’ bottle of wine. The margins and packaging costs may differ between businesses and the products being sold by the general statistics will remain similar.

As you can see, when you buy a £5 bottle, after the other fees are covered, you’re only getting roughly 31p worth of wine. Compare this to the £10 bottle, and you’re getting around £2.70 worth of wine. It may seem like a bit much to spend twice as much on your wine, but when you see that in actual fact you’re getting nearly 9x the value of wine, it really shows you it’s worth it.

Even when looking at the average price for a bottle of wine, which is £6.09, it still shows how much better the wine you are buying is. With these, you’re getting £1.43 worth of wine, which is more than 4.5x what you get in a £5 bottle.

At Broadway Wine Company, we know how much the quality of your wine means to you. That is why we only stock wines that we’ve selected especially for their premium qualities. But the best bit is that you can get these higher-priced wines for traded prices. This way you get the best of both worlds.

For example, our Villa Benizi Pinot Grigio can be found elsewhere for £12.95, whereas you can get it from our shop for only £6.50. So, whilst you’re paying £6.50, you’re getting wine worth the same as a £12 bottle, which is roughly 3x better than a £6 bottle from the supermarket!

If you’d like to see more wines at trade prices, visit our online shop. If you have questions about our products and services, feel free to get in touch and we’ll help in any way that we can.