It is budget time and so, rather than allow my anger at yet another rise in alcohol duty get the better of me, let us take a quick look at how wine duty works.
When wine arrives from overseas it comes to rest in a bonded warehouse. At this stage it has had no UK duty paid upon it and so is said to be “In Bond” (IB). With a little reflection you can understand why this is. The wine merchant puts the responsibility for paying the duty onto the final customer.
Potentially the UK may not even be the wine’s ultimate destination. In this happy tax-free state a case of wine may change owners many times without once stirring from its bonded resting place.
When the time comes for someone to drink it however (or sell it to someone else who will), then the exchequer takes its slice. The duty paid on wine (and indeed all alcoholic beverages) in the UK is amongst the highest in Europe, putting us in such company as Scandinavia and Ireland (suggesting, incidentally, that high rates of duty don’t mitigate excessive drinking).
Different categories of wine attract different rates of duty but, in general, what you might call table wine (with an alcohol content between 5.5 per cent and 15 per cent by volume) is all taxed the same. The case of Château Latour and the case of Lidl Pinot Grigio blush are subject to the same amount of duty. I can’t reiterate this enough: the cheaper the wine, the greater the proportion of the selling price is made up of tax. Drinking cheap wine is a false economy.
The wine is now said to be Duty Paid or DPD. It is of the utmost importance when perusing a broker’s list to note which wines have IB and which have DPD next to the price. What looks like a bargain can be quite different with an extra couple of pounds per bottle added.
Remember, duty only gets paid once so if you are buying wine that had its duty paid years ago you are, in a small way, protesting the exorbitant rates that we are being charged now. As if you needed an excuse, go and by some old wine, that’ll show the government.