Why you should buy Australian wine as prices set to rise next month

Duty

The first thing to be aware of is that the whole system of tax on alcoholic drinks changes on February 1.

There was a change in duty 18 months ago that put around 44p on a standard bottle of wine, but that was just a simple tax change.

From February 1 the duty will be directly related to how much alcohol your wine contains.

So, if your favourite wine comes in at around 14.5%, which about standard for many red Rhône wines or Barossa Shiraz, then the duty goes up from its interim level at £2.67 to £3.21, an increase of 54p, with VAT on top of that.

On a £9 wine at just 13.5% alcohol, which applies to many Chianti, Bordeaux and Rioja wines the total tax of duty and VAT works out at £4.50. So, as you take a sip of your wine, the Chancellor is enjoying it just as much as you are.

Large companies who keep most of their stock in bond will be hit by the increase on February 1, so if you normally buy from the big retailers you need to stock up in advance and stash it away under the stairs.

Go for your favourite higher end alcohol wines. Anything at 12.5% alcohol will definitely go up in price.

Smaller retailers such as Field and Fawcett in York are bringing as much as they can afford out of bond before the date so they will be able to delay putting up prices for a few weeks.

However, if you buy lots before February 1, then Peter Fawcett will be able to pull more stock out of bond.

All these changes are adding enormous cost for wine shops and businesses.

“I really would like my local MP to come and see just how much extra work this change in duty rates has caused,” said James Goodhart of Bon Coeur Fine Wines, based in Melsonby, which is in Rishi Sunak’s constituency.

Low and No

One of the fastest growing sectors in the drinks industry is No and Low alcohol drinks. Not only is this preparation against tax rises, but more people are cutting down on alcohol.

The term Zebra Striping has become the term for alternating an alcoholic drink with a non-alcoholic one on a night out. This is nothing new, because drinking a glass of water between alcoholic drinks has always been recommended.

Now with sophisticated low and no alcoholic drinks, it is possible to sip a flavoursome drink all night and not drunk any alcohol, so you can still drive home.

The technology involved in these drinks is complicated, and some companies have done it better than others. The early examples were too sweet and lacking texture.

Now, many non-alcoholic drinks use fermented tea as an ingredient which adds complexity and the savoury element expected in wine.

Kylie Minogue’s sparkling rosé and white has swept a number of competitors out of the market as they not only taste good but they come with the added stardust of Kylie who actually gets involved in the blending of the products.

Don’t be worried about the 0.5% alcohol frequently declared on some of these drinks. This is a legal declaration to cover the fact that some de-alcoholisation processes cannot get absolutely all the alcohol out of a wine. Apparently, although I cannot verify this, a ripe banana can contain 0.5% alcohol too.

Sustainability

Every winery in the world is now using the word sustainability. This doesn’t just refer to the way the grapes are grown and the wine is made, it relates to everything to do with the business.

Water, farming methods, biodiversity, packaging, even the employment of people is covered so that the wine industry sits within its local environment, without harming it.

There are various organisations which now can certify sustainability criteria, spawning a whole new regulatory industry and there are many conferences about the whole subject.

The main problem is that most consumers do not understand sustainability and whether they are paying extra just so someone can say they are ‘sustainable’.

Overall, sustainability is an excellent thing as a check against exploitation of the environment and people, but it will take some time for the worthwhile criteria to be measurable and regulated.

Supply and demand

The Australian wine industry suffered a setback when China closed its doors to Australian wines.

The ban was lifted last year but it is taking time for the stockpile of wine that built up during the ban to feed through the supply chain.

In the meantime, the Chinese market has changed with around a 25% drop in consumption. What this means is that Australia still has too much wine, so despite our own tax rises, prices are unlikely to rise much for everyday Aussie wines in the UK.

I wish that could be said of Burgundy where prices seem to go up on a daily basis. Production is tiny and in great demand around the world.

Many producers are now selling their wines in cases of three, rather than a six-pack, to make the purchase more affordable.

“There are good alternatives to the grand wines of Puligny Montrachet and Chambertin, but customers still want to buy and drink these top wines. They just cost more.” said James Goodhart, who visits Burgundy on a regular basis to seek out good wines from small producers.

English Wine

From a standing start just over 30 years ago, the English, Welsh and even Northern Irish wine scene has boomed. There are now over 1,000 vineyards in England and wine tourism is becoming a new industry.

Consumers often support their local vineyard by buying the wine or turning out at harvest time to bring in the grapes.

The quality of English wine has never been as good as it is now and will improve even more as vines age.