Wine has been a cherished and integral part of human culture for centuries. It graces our tables, accompanies our celebrations, and provides window into the rich tapestry of the world's diverse regions. But beyond its romantic allure and sensory pleasures, wine is also a significant player in the global economy. This fascinating intersection of wine and economics is known as "vinonomics."
The term "vinonomics" does not have a widely recognized or standardized meaning in the academic or professional world but essentially it covers all aspects of the production, marketing, distribution, pricing, consumption and even investment opportunities within the global wine industry.
Now so far, to the average wine consumer, this all sounds very dull, however it is important to know where your money goes when you purchase a bottle of your favourite tipple.
Did you know? The more you pay, the better wine you get!
This may seem fairly obvious but most customers are unaware of where their money goes when it comes to wine, particularly the hidden costs. These include a very high level of taxation as well as the costs associated with shipping and packaging. We feel it is important that our customers have this information to help them make more informed choices about which wines they pick.
You may be shocked to learn that the duty (tax) on the average bottle of wine in the UK now stands at an eye-watering £2.67. When you compare this to France at 30p and both Spain and Italy at zero tax it now becomes clear, when perusing the shelves in the wine section of a continental supermarket, that it is the UK Government that’s having the last laugh and not UK retailers ripping you off!
Putting all this into context, if you look at the chart below you will see that on a modest bottle of wine costing £6.50, the actual value of the wine that you consume is only 40p. This may explain why the wine seems uninteresting or even a little disappointing. But then if you spend just an extra £1.50, the value of the juice itself more than doubles and thus giving a much more pleasurable experience. This is ultimately the main reason why wine retailers suggest that you start looking at wines around the £8-9 per bottle mark in order to guarantee a fundamental level of quality.
So, with the exception of VAT, the other costs associated with wine are pretty much fixed. Yes, it is true that more expensive wines tend to have a little more spent on their packaging and they can also be more expensive to ship as they are not moved in bulk, but in general, for each extra pound you spend, the higher the proportion of your money goes on the quality of the product and significantly increases your wine drinking experience.
So maybe the old adage is true – ‘quality over quantity’
Thirty years ago I wouldn’t have accepted this, but now, as I slide through middle age, I realise that investing that little bit extra into a bottle pays dividends in the long run.
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