Price of wine
How much of the price of a bottle of wine is actual wine?
The marketplace for wine can be pretty competitive and people are often extremely price sensitive. It’s easy to assume that you get what you pay for, but is that always true?
Once logistics, duty, the bottle itself, margin for retailers and of course the ever present VAT have all been accounted for, there’s often not a lot left for the liquid itself. UK duty on wine is currently £2.23 per bottle, average packaging cost is 36p and logistics come in around 20p. Then we have VAT which on a £5 bottle takes up another 83p! This means the average £5 bottle of wine contains only 30 pence worth of wine. While the retailer makes a margin in this example of £1.08, the reality with some supermarkets and promotions will be a lot less, but it still doesn’t leave a lot for the actual stuff you’re drinking.
This all sounds pretty shocking, but as you go up in the price range you actually get greater value for money in terms of the portion of your money being spent on the actual wine. This is because duty, logistics and packaging all remain the same. The only real variables are the value of the wine itself, the VAT, and how much margin the retailer wants to make!
Does a higher price get you better value – more wine for your buck?
For a £20 bottle of wine you are actually getting £7.03 worth of wine. So 4 times the price gets you 35 times more ‘wine value’. That said, twenty quid is quite a lot to spend; way above the amount most people are willing to pay on a regular basis. That’s why at winehack we’ve been focussing on that sweet spot in the middle where you spend a bit more, say £10-£15, and the proportion of that invested in the actual liquid is still much higher than going for a £5 plonk.
This is all shown graphically on the below image, from research carried out by Bibendum wines.
So in terms of the value of the actual liquid in the bottle you certainly do get what you pay for… The only question left is whether the price of the liquid translates in to better tasting wine!
This is what winehack is here to help with – so keep your eyes on the posts as we compare similarly prices wines in search of the best!