Living in Ireland, awareness of our most recent budgetary amendments has been essentially unavoidable. While the extension of PRSI to the first €127 of the weekly wage, the PRSI extension to non-wage sources of income, the property tax as well as cuts to home care expenditure and other areas of public spending will undoubtedly hit people very hard over the coming year, it is the increase per bottle of wine seems to have really gotten to many of us. While I fully admit that a small rise in the cost of wine pales in comparison to the cuts some Irish residents will be facing in the coming twelve months, I must also admit to being quite fond of the stuff myself. Regardless, I was inspired to take a look at the tax rates on my vino to see exactly where my euros were going. Helpfully I was able to find the 2013 budget amendments to alcohol and tobacco on the Revenue website site here.
This document provided the rate of tax per hectolitre (100 litres), from which it’s simple enough to work out the rate of tax per 750 ml standard bottle of wine. This figure varied a bit depending on alcohol content and whether the wine was still or sparkling. I’ve ignored the category of wine under 5.5% ABV as it’s quite rare and I don’t think it reflects the average bottle of wine bought in Ireland. Rather I’ll be looking at still wines below 15% ABV, still wines above 15% ABV and sparkling wines above 5.5%. There are two interesting points regarding excise duty – the first is that it is a flat rate per bottle of wine, so cheaper wines will be hit harder proportionally, and the second is that because it’s added to the price before VAT, you will actually end up paying VAT on the excise duty you’re also paying. Which is a big galling, but how and ever. Here’s what I found;
Which I found quite surprising, to say the least. At the lower end of the scale, on a €10 bottle of wine, you’ll be paying anywhere from 50% to 75% in taxes, leaving whatever’s left over to pay growers, bottlers, label makers, hauliers, importers and retailers. Particularly on sparkling wines, which were hit even harder than still wines in the budget, expect to be spending less that 10-20% of the money you hand over on the actual wine itself. While €10 sparkling wines are not terribly common, I did manage one online here (assuming you buy a crate of 6), so they are out there. As we head up to €20 a bottle wines, we see that while you’re paying more in tax, the proportion of tax on the bottle drops sharply due to the flat-rate nature of excise duty. Thus, though doubling your expenditure, the amount of money you’re spending on the actual wine itself increases dramatically, which would hopefully mean a better wine. That said, a €20 euro a bottle Prosecco is still about 50% tax, which is certainly somewhat more than I expect to be sending towards Revenue when I feel like celebrating. And if you’re thinking of a cheap plonk, stay right away from the bubbly.
While I imagine I may be over-analysing the impact of an increase on tax on this entirely luxury purchase, it’s nevertheless a common purchase for many people across to country. I hope I may have provided a little bit of perspective on exactly where your money is going, and if nothing else the government have increased the degree to which you can enjoy buying cheap wine while abroad!
(P.S. I’m not a taxation expert by trade, but I believe my maths to be correct. If anyone spots any errors, please let me know so I can update this article accordingly.)