Can a bottle of wine ever be too cheap? Why it pays to spend a couple more pounds in the supermarket...

For this third column, our wine writer and sommelier Tom Forrest shows you what a difference a couple of pounds makes when it comes to buying wine
Take Tom Forrest's Malbec taste test...
Tom Forrest13 October 2015

A recent conversation in Vinopolis ended with the cry of “how much!!” when I mentioned the price of a bottle of wine I had seen in an off licence, not because how expensive it was, but because it was only £2.99. What’s the problem with that you might ask? The problem is, it’s too cheap!

That’s because of the dreaded word ‘Tax’. Did you know that wine (like the other vice tobacco) is taxed twice? We pay VAT at 20 per cent on wine but wine also carries a duty. Duty is a tax that you pay tax on.... yes, you pay the duty and then you pay VAT on the total price of the product and the duty.

What this means is that cheap wine is really cheap. My £2.99 bottle of Spanish wine for example (I didn’t buy it by the way) can be divided this way: tax is £2.55, profit for everyone in the production/retail chain is £0.44. To put it another way 85.2 per cent of the retail price of that wine goes straight to the tax man. And by the time the retailer’s profit, storage and transport costs are deducted, the wine itself must have cost pennies to produce. You can see why I didn’t buy it.

The good news about duty (if there can be good news about a tax) is that it is a fixed rate per bottle and bears no relation to the cost of the wine (that’s VAT’s job). Currently the rate is £2.05 per bottle of table wine. So the more that you pay for your wine, the less you pay in tax (as a percentage) and the better the quality of the wine.

Finding this all a bit confusing? Here's an experiment I set up for you to try.

This week I am recommending three Malbec wines from the same region of Argentina at different price points and showing the different tax paid on those prices. Try them and see the difference a few pounds can make to your wine enjoyment. To help you, use the app UK wine Tax Calculator (free on iPhone and android) that will 'do the mathsp for you when you are shopping.

All these Malbec wines display the bramble, violet, blackcurrant and spice notes that you would expect to find on an Argentinean Malbec and are great with a thick steak cooked just the way you like.

Malbec taste test

1/3

Firstly, the Opi Malbec 2014 from Mendoza (£7.99/£3.38 or 42.3 per cent tax) this is a gluggable crowd pleasing wine, full of the flavours of soft, ripe fruits. A wine that you can out your feet up and relax with.

Secondly, the San Lucas Malbec 2014, again from Mendoza (£9.99/£3.71 or 37.2 per cent tax). This is a slightly more serious wine with eight months in American oak barrels adding a soft vanilla edge to the liquorice, violet and blackberry fruits.

Finally the Ataliva Malbec 2014 from Mendoza (£12.99/£4.21 or 32.4 per cent tax), a much more complex wine with cloves, black pepper and wild hedgerow brambles and currants all coated with soft vanilla.

It seems to me that my wine pleasure goes up as the tax percentage falls... I wonder why?

Tom Forrest is the Head Sommelier at Vinopolis. Follow him on Twitter @VinopolisTom

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