Yes, wine duty HAS gone up again

You might be justified in thinking that the Chancellor had let off Britain's winedrinkers in the Budget a couple of days ago. Sadly not.

Basically he didn't interfere with an inflation-linked rise in duty which had already been put in place by the previous government. Duty will in fact go up by 7.2% - that's roughly 15p a bottle.

As Gavin Quinney of Chateau Bauduc points out in his passionately argued blog post today that makes Britain's wine duty the highest in Europe.

Most retailers are saying that they won't be putting up their prices immediately. But they will over the next few weeks, no doubt about it.

Not that I think that's any cause to panic buy unless you've run low on your favourite tipple. There will always be deals. But there will be still less variety on the supermarket shelf or interesting wines coming into the country and that is depressing.

Useful UK wine tax calculator

Following on from yesterday's post about the VAT increase here's a nifty new iPhone app called UK Wine Tax Calculator you can download to find out how much of the cost of your bottle is accounted for by tax.

It's fairly startling to see that over 50% or £2.52 of a £4.99 bottle of 13% wine is now accounted for by tax - £1.69 duty and 83p VAT, leaving just £2.47 to cover the cost of packaging, transport, labour and of course the wine itself.

On a £6.99 bottle of the same ABV that goes up to £4.14. (The duty remains the same and the VAT goes up to £1.17) which shows that it is worth spending as much extra on a bottle as you can afford - and snapping up special offers on more expensive wines as and when you find them.

Why you shouldn’t panic about the VAT increase

If your instinct is to rush off this afternoon and stock up on wine before the VAT increase comes in tomorrow, hold your horses. The increases really aren’t that big. I got my husband, who is considerably more mathematically minded than I am, to work out the increase on a number of popular price points and these are the figures he came up with:

A £3.99 wine will go up to £4.08 (i.e. an increase of 9p), a £4.99 one to £5.10 (+ 11p), £5.99 to £6.12 (+ 13p), £6.99 to £7.14 (+ 15p) and £7.99 to £8.16 (+ 17p).

Of course it’s perfectly possible that retailers will take the opportunity to hike prices further to reflect other costs but equally likely that they - or the supermarkets at least - will continue to put a large selection of wines on special offer. As we’ve seen in the run-up to Christmas wine is a major battleground in the supermarket price war.

There is of course another way to keep the cost of your wine-drinking down which I've suggested in my Guardian column this week. Which is to drink the wine you normally drink, just rather less of it. I'm not taking a moral line on this just pointing out the financial (and health) benefits!

I've also spotted that quite a number of wine retailers aren't increasing their prices til the end of the month including Majestic and Great Western Wine. Yet another reason for keeping calm ;-)