In this post, we reveal our quality-value bliss point (ooh er!) - and give you the numbers behind the shelf prices. We’ve also picked out a couple of rip-roaring recommendations from our rounds at recent trade tastings: wines you should try that set the benchmark for quality and value.
Value exists at all price levels. Expensive wine is worth it if it blows your face off with its beauty and charm. If it doesn’t, it’s bad value. Simple.
But it’s much more of a minefield at the cheaper end of the scale, where most of us buy our wine. The average price of a bottle bought in the UK is still under £6 - around £5.50-£5.60 according to various surveys - which tells us where the real volume in the market lies.
Naturally it’s at this price point that supermarkets and discounters focus their immense purchasing power, squeezing suppliers to maintain retail margin. They’re businesses. You can’t blame them, but you can consider the numbers behind the pricing and the very real pressure on the cost of wine production.
Because here’s the rub: the cost of glass, cork, transport, storage and alcohol duty remain fairly constant in every bottle of wine. Margin and VAT grow proportionately to the price. Which only leaves the cost of the wine in the bottle: the one variable that can be disproportionately squeezed.
Don’t get me wrong, there are times when a bottle of £5 plonk is the right thing. Uni years would certainly have been a lot less jolly without Sainsbury's "House".
But to illustrate the effect of the squeeze, I’ve had C&B’s crack team of designers draw up these diagrams.* They compare the typical cost of the wine in a £5.50 bottle to the wine an £11 bottle:
In the £5.50 bottle, the amount spent on the wine is around 29p. In the £11 bottle, the amount spent on the wine is around £3.61. That’s 12 times more. Double the price, times the amount spent on the actual wine by 12.
To put it another way: in the cheaper bottle, the proportion spent on the actual wine is the liquid in the bottleneck. For the £11 one, it’s a about a third of the bottle.
Whichever way you put it, it's exponential.
Ask the question: what’s the point at which value and quality really start to get it on? We think it’s around £11.
Here are the five reasons that make this add up:
Duty. Duty is currently a flat £2.16 on every bottle of normal still wine bought in the UK.
VAT. What’s more, you pay VAT on duty. So add 20% VAT to the duty and you get £2.59 in cost before you’ve even started thinking about the wine. You also pay VAT on the wine, so add another 56p for the £5.50 bottle. We’re already at £3.15 just in tax.
Punitive tax. That’s 56% tax on a £5.50 bottle of wine. Duty and its mate VAT are blunt bruisers that punish those buying at the lower end. To get political: we believe in tax, but not flat, regressive taxes which mean that people who can't spend more are taxed a higher proportion of income for the privilege of consuming inferior products.
Bliss. At £11, tax makes up 36% of the bottle. This means the £11 bottle comprises about third in tax, a third in cost of sale, and a third on the wine. The tipping point of bliss.
More? Of course the more you spend beyond £11, the smaller proportion goes on tax and other costs, and the more goes on wine. Hurrah!
It is around the £10-12 mark that wine merchants can start to offer premium wines at a fair price. Certain good-hearted producers, too, are keen to help them stick around it, mitigating the dire effect of weakened currency on UK buyers with sensible discounts they can pass on to consumers. Wines at this price point sell in good quantities. So you'll often find wines which could be more expensive held at this price level to encourage volume.
But - big but - while informative, numbers don't say everything. Expensive wine doesn't mean good wine; there's also some bloody good sub-£6 plonk out there. The bliss-point premise depends wholly on honest wine merchants making the most of the delicate tipping point in cost and price. An unscrupulously sold £11 bottle is always going to be a far worse prospect than Sainsbo’s five-quid Beaujo.**
Our ultimate advice is to buy from someone you trust, who cares about quality, price and their suppliers. The supermarkets do care about quality. Don’t let any of our indie merchant friends fool you. But they can throw their weight around with producers, who take the often unsustainable hit on wine price.
The key is to find balance. There are times when you want mass-market trash. We all do. And it's a bugbear of ours that independents aren't better at cheap wines. We don't always want boutique bottles sold by a hipster with a beard and a bulging conscience. But if you're looking for truly premium wines at the sparest price, seek out good indies and blissful bottles.
To taste what we mean, check out our picks of the month below.
* I didn’t really, you TOTAL loon. I did them all by myself! So, while tax rates are accurate, other figures approximate typical retail costing. Proportions are by eye.
** Because Sainsbury's was the supermarket in my university town, I know with a passionate intimacy, and still love, their "House" range. Other basics ranges are available for your own nostalgia purposes.
wines of the month: C&B Bliss point picks
baron de badassière picpoul de pinet
kaiken cabernet sauvignon clásico