Lessons from history: cheap bottles of wine have always been appallingly bad value

We've covered the rationale of trading up because of high wine duty on these pages before. In the simplest of terms, with a fixed rate of alcohol duty, a bottle of wine becomes better value the more you pay for it. The rule is at its starkest in the sub-£10 range.

Since the most recent Budget, the excise duty on a bottle of still wine has stood at a record two pounds. So at the average UK bottle price of £5.11, nearly one-half of the cost of your purchase is going straight to the Exchequer. When you factor in VAT (£1.02) the proportion is greater than 50 per cent. Given this context, it is not surprising that spending just a little bit more makes a massive difference.

What is quaintly surprising is how this advice is nothing new. The Spectator has recently put its entire archive online, creating an easily navigable treasure trove of lettered nuggets. I have been rummaging through it over the past few days and found this article on Italian wine from 1978 by Geoffrey Wheatcroft, then the magazine's literary editor. "Dearest" Chianti Classico for £2.35 and a case of twelve bottles of Barolo for £28.70 seem quaint to today's eyes (though be mindful that the latter would be in the region of £300 in today's money). However, here is Mr Wheatcroft's advice to would-be buyers regarding excise duty:
"It can, of course, be demonstrated mathematically that the less you pay for a wine the worse value, in a sense, it is. The duty is the same on a bottle of Chateau Margaux as on a bottle of Algerian Undrinkable, about 60p per bottle at the current rate. Thus, for a bottle costing 90p (such as it is just possible to find), only a third of your money is spent on the wine; two thirds goes to the Government to be spent in some displeasing way. With a £6 bottle there is at least the consolation of knowing that nine-tenths of the outlay is going on the wine. It follows that in England very cheap wine is to be shunned, while in countries with a less wicked taxation rate on wine the cheap wine can be treated as we treat beer."
With VAT of 12.5 per cent to be reckoned with too, Mr Wheatcroft's bottle of wine costing 90 pence would have included 71 pence of combined duty and sales tax. Cheap plonk was even worse value in 1978 than it is now. Yet thus far England's drinkers have shown only the smallest inclination to shun it.

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