Imagine buying a case of wine. Now imagine removing six bottles and leaving them on Alistair Darling’s doorstep. That, in effect, is the upshot of last week’s budget, which has pushed duty to £1.69 a bottle, the highest in Europe after Finland and Ireland. Add VAT and the total tax on most wine amounts to more than half of its retail price.
I’m afraid the bad news doesn’t stop there, because the Chancellor isn’t the only person who takes his cut. By the time you’ve paid someone to make, package, ship, store and sell your wine, there’s very little left over for the actual liquid. It may shock you to learn that a bottle that costs £4.99 probably contains only 40p worth of wine.
Sterling’s slide against most currencies hasn’t helped matters. This has pushed up the cost of wine from Australia, New Zealand, South Africa, Chile, the USA and mainland Europe by 25% or more in the last two years. No wonder we wine drinkers are watching the Greek economic crisis with interest.
The weird thing about all these increases is that they have had very little impact on the shelf price of most wines. At £4.32, the average bottle costs more than it did a year ago, but it certainly doesn’t reflect the collapse of sterling or the Treasury’s decision to kick wine drinkers where it hurts.
The reason for this is what supermarkets call “driving footfall”, code for tempting you into store to part with your money. Wine offers are acknowledged to be the best way to get punters through the door, which is why you can still find three for £10 deals out there. Most of these are loss leaders, deliberately and cynically priced below cost. The supermarkets make up the shortfall on other products, sacrificing the quality of their low-end wines in the process.
Another trick is artificial promotions. One supermarket was offering a mediocre Saint Emilion at £7.49 recently, for example, down from £14.99. This wasn’t an outright lie, but it was misleading. To sell a wine at half price, it has to be available at full price in at least one store for 28 days, but that’s the only legal restriction. The sting is that the wine was never worth £14.99 in the first place. A good source in Bordeaux tells me that it should retail at £6.99 and sells in Calais at 5 euros a bottle.
More than 50% of all supermarket wine is now flogged on a deal. In some cases, the offers are genuinely tempting, but mostly you get what you pay for. A wine at £3.33 is unlikely to be enjoyable, even if it’s sold at a slight loss, for the simple reason that no one can make good wine that cheaply any more. Not even in China.
So how much should you spend? As much as you can afford is my advice. Given that duty is a fixed cost, all £1.69 of it, the value of the wine in the bottle increases as you trade up. At £4.99 it’s around 40p; at £8.99 it’s closer to £3.50. You don’t have to spend a fortune to notice the difference in your glass.
You can still find good wine at £4.99 or less, but it’s getting harder by the vintage and fiscal year. The problem is that we are so addicted to special offers and cheap prices that wine has its own glass ceiling. People who think nothing of spending over the odds on extra virgin oil baulk at the idea of an £8.99 wine.
It’s important not to confuse cheapness with value for money here. A wine at £8.99 can offer better value than one at £4.99. This doesn’t mean that you have to part with £20 or more to drink well, unless you’re buying Champagne or red Burgundy, which are expensive to produce.
The wine drinker’s sweet spot, where true value is to be found, lies somewhere between £5.99 and £8.99. In that range, you can find great bottles from almost anywhere. Trade up and you’ll be doing your taste buds a favour. The man at Number 11, Downing Street may be taking more of your money, but he can’t stop you enjoying good wine.
SIX SWEET SPOT WINES
2008 Fontaine du Roy, Costières de Nîmes (£5.99, 14%, Waitrose)
The Costières de Nîmes appellation in southern France makes some of the country’s best value reds. This blend of Syrah, Carignan, Marselan and Mourvèdre is rich, savoury and aromatic with notes of blackberry, liquorice and vanilla.
2007 Araldica Arneis, Langhe (£6.12, 12.5%, Tesco)
The Piedmont region of north-west Italy is much better known for its muscular reds than its perfumed, refined whites. This is crisp, bright and refreshing with flavours of aniseed and green olive and tangy, citrus fruit acidity.
2007 Ramon Bilbao Rioja “Single Vineyard” (£8.99, or £6.74 each for two until April 26th, 13.5%, Majestic)
Quintessential modern Rioja, based on the Tempranillo grape. Deeply coloured, vibrant stuff with a hint of creamy oak, spicy red fruits, refreshing acidity and impressive concentration. Worth keeping for a year.
2008 Taste the Difference Barossa Shiraz (£8.09, 14.5%, Sainsbury’s)The sort of Aussie wine that could only come from the BarossaValley, this plush, smoky-oaky red is saturated with colour and flavour. Brambly, plummy and sweetly oaked with supple tannins and a rich finish.
2008 Marks & Spencer Mâcon-Uchizy (£8.99, 13%, Marks & Spencer)Wines from Burgundy’s southern outpost are often the most New World-like, but this one is gloriously old-fashioned and unoaked, showing rich, honeyed flavours underpinned by a chalky, minerally bite.
2008 Domaine de Villagreau, Coteaux du Giennois (£9.99, or £7.99 each by the mixed case, 12.5%, Oddbins)
The appellation may be unfamiliar, but the grape variety isn’t. This Loire Valley Sauvignon Blanc is a fantastic alternative to Sancerre, but with an intensity of gooseberry fruit that will remind you of New Zealand.
Originally published in The Times