Currently in the UK on a wine selling for £5 per bottle £2.64 is actually tax!
There are two parts to this blog. Firstly explaining the con the supermarkets use to sell inferior wine, and secondly a breakdown of the actual costs of a bottle of wine where you can see who is actually making all the money, and why you really shouldn't buy £5 wine!
We can all begrudge the ever increasing price of a bottle of wine, and naturally to save money we tend to look for the cheaper options. The supermarkets seem to have some great deals on - half price, reduced from £9.99 to £4.99 - that has to be a good deal, right?
No It is not, and here is why:
Firstly for these offers to qualify legally as a genuine half price deal, the wine has to have been on sale at one branch for at least two weeks at it's "full" price. They get round this by giving it an obscure single facing on a bottom row virtually out of sight, in a remote store, at a massively falsely inflated price. After two weeks they then give it multiple facings, centre shelf nationwide at half the inflated price. Looks like a great deal, but in reality the wine is now on sale for the price it should have been in the first place.
In the trade this is easy to recognise because we see the same wines from the importers at the same prices year round, routinely over inflated by the supermarkets at regular intervals. It should be illegal, but the supermarkets are experts at bending the law, and they're now so powerful the government is scared to touch them. The supermarkets work on a 35% margin on wine - this would be completely impossible with a genuine half price deal! In fact nobody makes a margin where they can genuinely offer this kind of discount. Use your head - if it looks too good to be true, it is. You are being conned.
So what is the genuine value of the wine?
Basically the wine is worth about 5 pence per bottle! Yes, that is genuine fact. It's mass produced plonk full of chemicals. As you can see if you spend a little more from a bona fide wine merchant, like a bottle in the £8.99 price bracket, you will get a wine worth £2.62, approximately 53 times more than the supermarket plonk!
It certainly makes you think what you're putting in your body when you drink this cheap plonk. Would you eat meat or fish which cost just 5 pence?
Check out the "app" called UK Wine Tax Calculator and is free - this calculates how much of the wine's price is actually tax. It was interesting to see at the price point of £5 per bottle that £2.64 is actually tax!