Wine: Good bargains?

As a country, Britain has been fortunate and somewhat spoiled by the choice of wines available to its consumers. Almost every wine producing country has its ware somewhere on the shelves of the UK. Supermarkets, high street multiples, independent merchants and the internet all offer a wide range of wines from the cheap and cheerful to connoisseur products. Customers are more and more lured by the attractive bargains on offer. At times one cannot help the feeling that the only way wine can be sold in the UK is through discounts.

Typical discounts available from supermarkets and multiples are ‘buy one get one free,’ ‘3 for 2,’ ‘3 for £10,’ and the latest is an offer of up to 50% off the original price. Let’s see how this works and whether there are real bargains to be had or this is just another ploy. Is it really the case that a wine that costs £7.99 can be sold overnight at £3.99 as offered by Asda, Tesco and the likes? I tend to be suspicious when I see this kind of offer. Was the wine really worth £7.99 to start with, as I am made to believe? Are supermarkets really so generous as to happily give away 50% of their profit?

Let’s take, for example, the ‘3 for £10’ offer, which works out £3.33 per bottle. The table below shows that after duty and VAT has been paid to the UK government, what one is actually drinking is hardly worth anything. One needs to be mindful that the ‘total rest’ includes not only the price of the wine, the producer mark-up and cost of making and bottling the wine, importer/agent mark-up, transport, insurance and retailer mark-up. So how much exactly is the wine in the bottle worth?

‘3 for 2’ is a typical bargain found at Oddbins, Threshers and Majestic. This is not significantly different from ‘3 for £10,’ but is presented in a clever way, and the wine here tends to have around £0.40 - £0.50 more value.

Retail Price(£) 3.33 3.99 5.99
Duty 1.25 1.25 1.25
VAT 0.50 0.60 0.90
Total UK Gov 1.75 1.85 2.15
Total rest 1.58 2.14 3.84
The real worth of wine in the bottle

Another word of caution: In the coming weeks, the Chancellor of the Exchequer will, as many commentators predict, present his last budget from number eleven. As in all the previous budgets, the excise duty is likely to go up again. It is yet to be seen whether this increase will be transferred to the customer in the form of higher wine prices or will rather affect the value, and consequently the quality, of what is in the bottle.

It is not difficult to see that these bargains do not necessary mean value for money. So don’t be misled by the supermarkets and multiples, whose primary goal is to make as much money as they can to be able to show positive yearly results to their shareholders. If you see a bargain next time, do the mental maths before you decide to buy a bottle.

For good quality wines and a fantastic selection from just £5.99, take a look at the Corporate Wine UK web site

For more good value wines, Oddbins prices include delivery, usually next day.