Budget – November 2006

With the recent news that the European Court of Justice is likely to rule that, via the internet, stay at home shoppers may well be able to substantially reduce the duty they pay on beer, spirits, wine and cigarettes, I felt it time to examine the thorny issue of excise duty payable on wine here in England.

Earlier this year, on the eve of the March budget I was invited to undertake a wine tasting to entertain a number of local bankers, solicitors and the commercial great and good of the county at a gathering at the new Refectory adjacent to Norwich Cathedral; all on behalf of a local firm of accountants. Conscious of trying to offer a little topical entertainment to the tasting, I devised a visual quiz showing a 75cl wine bottle and a scale of percentage points with the question – if you purchase a bottle of wine here in England for £3.99, what percentage do you pay in Tax and Duty? The prize for a correct answer was a magnum of Champagne. Surprisingly, given the assembled professional clout in the Restaurant not one single correct answer was received, the magnum remained here in our cellars. The answer, by the way was 47%.

The duty payable to Customs and Excise on each and every bottle of still wine entering the country is £1.29 no matter what the final price on the shelves turns out to be. Add to this the VAT on your bottle of 60p, an average mark-up at the supermarket or off-licence of £1.00 and we are left with just over a pound sterling of tangible purchase. From this we subtract the cost of a bottle, label, foil and cork. Thereafter, we have a cardboard box and a man with a lorry, often on board ship, who will personally escort your bottle half way around the world if necessary.

Now what have I omitted, Oh yes, you’re ahead of me, the wine itself! Not much left I am sure you have gathered; thirty pence to be precise.

So, apart from a lengthy seminar with our Chancellor regarding this draconian tax, the UK, having the second highest excise duty rate in the European Union after Ireland, how can one assess proper value, rather than cost, when one purchases wine.

The joys of a day trip to Calais on the Booze Cruise in order to beat Gordon Brown at his own game have often been cited by my agricultural customers here in North Norfolk as a certain price-beater.

However, upon examination, the hidden costs offer less of a saving than one would imagine. The Automobile Association are presently quoting car running costs at approximately 40 pence per mile. With a round trip from Norwich of 376 miles motoring costs are in the region of £150. Bolt on the ferry, a glorious lunch, no doubt, and even an overnight stop and the savings begin to diminish. However the choice of wine in many of the well-known outlets differs widely. There are of course the usual supermarket suspects in abundance. Such as Gallo, Blossom Hill and Kumala, added to which are those “mystical” plastic bottle bargains which a colleague of mine having once made such a purchase cited the contents as “not fir to dress wounds with” the choice begins to diminish. Majestic Wines of course, have pioneered a scheme by which wines can be

pre-ordered from any of their stores and simply collected from France on the day, but again choices can often be limited.

By far and away the most salient point of discourse is both locating a range of wines to suit individual tastes and the ability to constantly extend one’s vinous

horizons. Those of you who know an independent wine merchant or two in East Anglia, a range of counties harbouring some of the most qualified merchants in the country, will know the form when it comes to stocking a cellar, albeit a wine rack under the stairs.

Firstly; for those with limited knowledge or a desire to experience the eclectic word of wine, information and advice is paramount and often helps reduce some of the intimidation a wine shelf may incur.

Secondly – consider the overall costs already cited, our £3.99 bottle offering you 30 pence is disarming. Double the purchase price of your wines and with taxes etc, as fixed costs, the value of the wine inside the bottle leaps to a staggering £3.00.

Thirdly; with most local wine merchants offering free delivery the cost of postage or courier service needs to be assessed per case.

Digg This
Reddit This
Stumble Now!
Buzz This
Vote on DZone
Share on Facebook
Bookmark this on Delicious
Kick It on DotNetKicks.com
Shout it
Share on LinkedIn
Bookmark this on Technorati
Post on Twitter
Google Buzz (aka. Google Reader)