Get more wine for your money – wine duty explained

Wine prices can be confusing and often misleading – higher isn’t always better. Whilst quality is often the overarching factor, scarcity frequently plays far too great a role when it comes to wine prices. You also have marketing and geographical factors at play, with a region’s reputation boosting desirability and price.

There are a huge number of other influences on price but we aren’t here to explain why a bottle of Blossom Hill only costs £5 (which is far too cheap for any wine - but given you're reading this, we know you know that already). Instead we’re here to talk about duty and how it can help us work out how much of your pounds sterling is being spent on making that wine as delicious as it can be.


The lay of the land

When wine is imported into the UK, the pallet will often land in a bonded warehouse which allows the importer to defer paying duty — the tax the government place on imported goods — and VAT on their goods, until they are ready to sell them, at which point duty and VAT are paid to release the respective wines.

At the time of writing, duty is £2.23 per bottle of wine and £2.86 for sparkling wine. On the 1st August 2023 these will be updated to create a flat rate of £2.67 per bottle for any wine over 12.5%, be it still or sparkling. Wines under 12.5% ABV will be subject to a lower rate which is still TBC.

So, whether you’re spending £5 on Blossom Hill or £500 on Chateau Mouton Rothschild, duty doesn’t change. This is where we begin to see why understanding duty can lead to drinking better wine.


Wine duty broken down in real terms

If you pay £10 for a bottle of wine, only £2.48 of that has gone into making the wine. £2.23 goes straight on duty, and £1.67 on VAT. Add to that an industry average of £0.94 for packaging and logistics (source: Bibendum) and the average margin made by winemakers and importers combined, less than a quarter of the £10 you have paid for your wine has actually gone towards making that wine worth your while.

However, increase your spend by 50% to a £15 bottle and, based on the same industry standard costs, £4.68 of your money ends up paying for the wine itself – an 88% increase on that of the £10. Suddenly, the 50% increase seems like a great deal given the quality of wine almost doubles.


What does it mean for you?

We’ve designed our wine subscription boxes to help you take advantage of this knowledge and help you find wines for your glass, not your cellar. Each month our Three Fresh Drops subscribers receive 3 bottles worth around £15-20 each, compared to the £10-a-bottle average of some of the larger online wine subscription businesses with big introductory offers (let’s call them Nude wines).

So, understanding duty in wine shows us that paying a bit more on your wine, gets you better bang for your buck.



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