Irish Budget 2009, October 2008, and the wine business
From midnight last night the excise duty on a 75cl bottle of still wine has been increased by 41c to €2.46. Once again Ireland has the highest duty on wine in the EU.
This change will correspond to an increase of more than 41c in sales prices, because duty enters our calculations at a relatively early stage, before VAT and our own and our customers' margins are taken in to consideration. When the VAT increase of ½%, also announced yesterday, is implemented in December, we shall very probably have to review our prices again.
While we wait to hear how the increase applies to products other than still wine between 5% and 15% alcohol by volume: sparkling wines, sake &c. (a pro-rata increase was announced, and I'm expecting a detailed schedule from our bonded warehouse this morning) there is the delicious and manifold task to savour of updating all our prices, wherever they appear, and trying to find the best way forward for customer relations.
I might have a beer (which was unaffected yesterday).
UPDATE/CORRECTION
On looking at the duty rates schedule kindly forwarded by our local Revenue officer, it's clear that the increase in excise duty is actually 41c - the 50c widely reported adds VAT to this figure. Duty on sparkling wines - anything under a mushroom cork of typical abv - is still doubled; that is 82c/€1 per bottle.
We'll be increasing our retail prices as necessary then by the convenient VAT inclusive figures, with the following exception. Because of the relentless fuel surcharges that we have absorbed over the last year or so; our suppliers' price increases, largely due to the increasing costs of packaging, glass &c.; and in anticipation of the minor adjustments that the ½% VAT increase in December will provoke, some of our wines' RSP will increase by a few cents more to yield whole euro and 50c price points across most of the range.
We've discussed this at length and think it a fair and reasonable way to proceed. Please let me know if you feel otherwise.
This change will correspond to an increase of more than 41c in sales prices, because duty enters our calculations at a relatively early stage, before VAT and our own and our customers' margins are taken in to consideration. When the VAT increase of ½%, also announced yesterday, is implemented in December, we shall very probably have to review our prices again.
While we wait to hear how the increase applies to products other than still wine between 5% and 15% alcohol by volume: sparkling wines, sake &c. (a pro-rata increase was announced, and I'm expecting a detailed schedule from our bonded warehouse this morning) there is the delicious and manifold task to savour of updating all our prices, wherever they appear, and trying to find the best way forward for customer relations.
I might have a beer (which was unaffected yesterday).
UPDATE/CORRECTION
On looking at the duty rates schedule kindly forwarded by our local Revenue officer, it's clear that the increase in excise duty is actually 41c - the 50c widely reported adds VAT to this figure. Duty on sparkling wines - anything under a mushroom cork of typical abv - is still doubled; that is 82c/€1 per bottle.
We'll be increasing our retail prices as necessary then by the convenient VAT inclusive figures, with the following exception. Because of the relentless fuel surcharges that we have absorbed over the last year or so; our suppliers' price increases, largely due to the increasing costs of packaging, glass &c.; and in anticipation of the minor adjustments that the ½% VAT increase in December will provoke, some of our wines' RSP will increase by a few cents more to yield whole euro and 50c price points across most of the range.
We've discussed this at length and think it a fair and reasonable way to proceed. Please let me know if you feel otherwise.
