Three people decide to buy some wine. Let’s call them Peter, Paul and Mary.
Peter goes into the supermarket and buys two bottles of wine at ?6 each (I saw this in a local supermarket during the pathetic summer of 2015). This transaction nets the Government ?8.62 in tax (yes, 72% of the cost). I could also say that the purchaser nets a humongous hangover because of the additives (Pesticides, Fertilisers and the like) that go into cheap wines. But that would be churlish of me.
Meanwhile, Paul very sensibly decides to go into a lovely, family-owned specialist wine shop in Clontarf and buys one bottle of a well-made wine for ?12, giving the Government just ?5.43 of the ?12. I say ‘just’ but I mean ‘an outrageous’. Still, it’s ?3.19 less than Peter paid them. And there’s also a saving on Solpadeine.
While in the nice shop in Clontarf, Paul notices Mary beside him buying a really nice bottle of wine for ?29.
“Excuse me, do you know how much of that goes on tax?”, he asks, more in hope than expectation.
“Yes, I’m very well informed on these matters” comes the reply from the well-informed Mary. “?8.62”.
“Wow. That’s only 29.70% of the purchase price. I’ve just given the Government 45% of my ?12”.
“I noticed that. Still, yours is a lovely wine, and it could be worse – you could have bought two supermarket wines at ?6 each. Then you would have given the Government 72% of your money, which would equate to the same amount in money terms as I’m paying in tax for my ?29 bottle. OK, you would have had two bottles of wine instead of one, but in that instance I use the term ‘wine’ advisedly. Enjoying wine is about quality over quantity – a lesson I’ve learned the hard way over the years.”
Noticing, with some surprise, Paul’s interest piquing, Mary continues; “The quality of the wine in the bottle grows exponentially the more you spend on it. This is because the percentage tax element drops as the price rises. This, in turn, leaves more of the purchase price to go towards what’s actually in the bottle. That ?6 supermarket wine leaves only ?1.68 to go to pay the winemaker, pay for the label, the bottle, the cork, profit for the importer and the supermarket. There can be no more than 10c worth of wine in the bottle. What self-respecting winemaker would go to any trouble for that?
This is our special occasion wine. It’s our anniversary”, continues Mary.
“Congratulations” says Paul. “How long?”
“Thank you. 3,000 days.” says Mary, leaving the shop.
“Seems to know her stuff” says Paul to the very nice lady behind the counter. “Can I change this for one of those?”
I’m not saying this actually happened, but it could. And I could rant on, but I won’t. To summarise:
Ireland has the highest Excise Duty on wine in the EU
Irish Excise Duty is 106 times that of France’s
48% of an ?11 bottle of wine in Ireland goes straight to the Government, but only 29% of a ?30 bottle.