The chancellor of the exchequer is currently standing at the dispatch box in the Houses of Parliament trying to balance the books of the UK economy. Often there are announcements that are concealed or wrapped up in political speech, which ultimately confuse us.
I am trying to get some clarity:
The announcement of no increase in duty on wine is very misleading. The previously announced increase was 2% above the current inflation rate (which is 3.4% at end of February 2012). This announcement was made by the Labour government back in the budget of June 2010.
Duty for still wine(less than 15% alcohol) until today was £21.71 per case of 12, or £1.81 per bottle.
If this goes up by 5.4% then the new rates will be £22.88 per case of 12, or £1.91 per bottle.
In effect this means that a bottle of wine that retails at £5.99 in the UK with a standard margin for the retailer (of 25%) and transport costs (from vineyard to UK warehouse taken as £5 per case) will have to cost €1.70 per bottle from the producer (in Europe).
The tax element of a £5.99 bottle in the UK is £3.11 (£1.91 duty, £1.20 vat (on the selling price))
I might have totally cocked up my maths! But hopefully this is more detailed and useful than the political mumbo jumbo.