As the old saying goes 'you get what you pay for' and wine is no exception. There are many factors that determine what price you pay for your favourite bottle but, more importantly, how much of what you pay for is for the wine itself?

First of all, quality. How do you measure that? Wine is very much a matter of taste. I always say that if you like it, it's a good wine. As far as the market goes however, quality is based on intensity of flavour, balance, length and complexity. I'll not go into too much detail but much of this comes from reducing the number of grapes on the vine to concentrate the flavour and having a skilled winemaker to blend the wine and get the very best from the grapes. Investing in good technology and the best people for the blending and ageing processes is a costly business. And this is even before we've considered bottles, labels, cork, marketing, shipping and most importantly VAT and Duty.

VAT and Duty

This is by far the main reason why it's better to spend a little more on a bottle of wine. The duty on a bottle of wine from anywhere in the EU is £1.34 a bottle. This is the case for each and every bottle that enters the UK so if you think of a £3 bottle of wine, that's nearly half the cost of it accounted for. Add on VAT, shipping, packaging and retail mark-up and you have very little that actually goes on the wine itself – actually around 12p.

If you take that £1.34 from a £7 bottle of wine, you have £5.66 to cover those other costs, which leaves around £2.22 for the winemaker to make the wine. Some difference! The chart below shows this well. By spending £4 more, you are buying a wine where 18 times more has gone on the wine itself. Next time you buy a bottle of wine, have a think about this – an extra few pounds make a huge difference in quality.