The other day I was chatting to Mimi Avery, of the famous Bristol wine importing firm. She said that she couldn’t understand how some supermarkets can offer bottles of wine at, say ‘£4.95 reduced from £9.95’. If the normal selling price was a tenner, how could they make a profit on a fiver?
Then by chance she found herself sitting on a plane next to a buyer from one of our biggest supermarket chains. She asked him. He replied with a chuckle that it was easy. The actual cost to the supermarket of the wine in the bottle would be around 87p. Everything else was extra: shipping, bottling, distribution, advertising, duty, VAT, and of course the mark-up. In other words, the wine was not remotely worth £9.95 in the first place; that was a way of clearing the way for a ‘half-price’ offer.
Since duty is £2 a bottle for still wine, whether it’s mass-produced rotgut or Château Lafite, and the other costs, apart from VAT, are more or less constant, the more you spend on a bottle the better value it is.
Get Britain's best politics newsletters
Register to get The Spectator's insight and opinion straight to your inbox. You can then read two free articles each week.
Already a subscriber? Log in
Comments
Join the debate for just $5 for 3 months
Be part of the conversation with other Spectator readers by getting your first three months for $5.
UNLOCK ACCESS Just $5 for 3 monthsAlready a subscriber? Log in