In the UK we pay a lot for our wine. Even in the puritanical USA wine is less expensive because it is less taxed. A bottle of wine at £4.49 includes £0.67 of VAT and £1.69 of duty, i.e. £2.36, which more than half the retail price, in taxes. That leaves £2.13 for the wine, the bottle, the transport and the mark-up of farmer, dealer and retailer. At £9.99 you are paying £3.18 in tax and duty and £6.81 for the wine; much better value provided you can afford it.
Duty went up in February 2010 from £16.05 per case to £20.25. And VAT will go up in January 2011 from 17.5% to 20%.
That is on top of a fall in the value of the pound over the last couple of years from around 1.47 euros in 2008 to around 1.2 euros today (2010). This alone implies a rise in the price of euro-area wine, the wine itself not the taxes, by around 23%.
We used to have a feel for what £3.99, £4.99, £5.99 etc. would buy. The retailers haven’t changed those price points, but today’s £4.99 bottle doesn’t contain last year’s £4.99 wine, it’s more like last year’s £3.99. We need to reset our personal ‘value points’.
Ever helpful, and handy with a spreadsheet, grapeguru will set out equivalent prices on a Price Points page.