The Exponential Value in “Trading Up” with Wine and the Gulp v Sip Flavour Factor
“The Quality Will Remain When the Price is Forgotten” Sir Henry Royce (Rolls-Royce)
As we start the beginning of the new year and hit the “dry January” season, it brought me around to a perennial subject matter in the trade regularly headlined under the banner “drink less, but better” – and what this might mean in relation to wine.
To set the scene with how diverse pricing is, you can still find wine for sale in the UK at under £5 per bottle (regular sale’s price), whilst comfortably exceeding £10,000 a bottle at the other end of the scale. Does that mean this bottle is 2,000 times better than the other – of course not; as aspects of rarity, collectability and investment values all come into play. But at a more realistic scale for most of us a £10 or £20 bottle of wine might very well be two or four times better than the £5 example. How might this be?
Well a lot has to do with the duty levels imposed on wine in the UK by government. Only Ireland and Finland have higher duty levels on wine than the UK in Europe. And mathematically the lower the price a bottle is the higher the proportion of its price will be accounted for by duties and much less by the cost of the wine itself. Please see the diagram below which neatly shows the percentage value for the wine at £5, as against £15 – as both bottles incur the same amount of duty (£2.23 per bottle) and VAT @20% on that Duty. Proportionately the value of the wine is significantly higher in the £15 bottle.
Does this mean a £5 or £6 bottle is rubbish – of course not; reputable retailers and merchants would not have them on the shelves if so. In the Wine Trust list, for example, is the excellent Spanish red Borsao Garnacha which (over) delivers amazing quality for the price and is one of the “finds” of their selection.
In fact, trade data analysis has identified that the threshold retail price point where you are finally paying less money on the tax for, than the wine (including production costs) itself, is £6.70! in effect for a £6.70 bottle, the value of the wine in it is £3.35.
And, as ever, the style of the wine is clearly very important. If you really don’t like the Shiraz grape it probably makes little difference if the bottle is £7, £15 or £25 – you won’t enjoy any of them! However, if you really do like Shiraz it might be worth exploring the extra quality and concentration you might well find in a mixed range of priced bottles? In fact, this approach may also be useful if you are looking to build a store of wine for mixed occasions and palates. The lower priced example maybe perfect for your midweek “pasta supper”, whilst the more expensive examples might deliver just want you want for the weekend, with a special meal or occasion.
And it is great fun to open examples side by side and investigate the quality differences – try this for example with these three New World Shiraz (Syrah) from the Wine Trust list – one at £7.50, £14.50 and £26.50:
False Bay “Old School” Syrah – great mid-week juicy South African
Casas del Bosque Syrah Gran Reserva – silky example from a Chilean Syrah/Shiraz specialist
John Duval Entity Shiraz – exceptional, concentrated Barossa Shiraz from master winemaker John Duval
In general, you should find the more expensive wines have greater levels of flavour and concentration and linger longer on your palate. As a result, you might often find you “sip” (and savour) rather than “gulp” the drink – because it is delivering a far more interesting flavour (and aromatic) kaleidoscope. It will provide more of a talking point, is worth reflecting on, and may well work better with food in general, or when planning a special menu and occasion.
Of course, we must always respect choices made in relation to someone’s budget, but I would strongly recommend trading up for certain occasions – and especially when you have identified grapes, regions and styles which you already really enjoy.