Apart from the colossal amount of money owed by Oddbins to small independent wine producers across Europe. The beleaguered wine company owes £5.5m to HMRC in unpaid UK wine duty.
So would someone please tell me how they have managed to defer that amount of tax?
If all that is wine? It amounts to an estimated 275,000 cases!
Mind you Oddbins own and control their own bonded warehouse in Wimbledon.
That might have something to do with it?!
BREAKING NEWS: Oddbins The high street wine giant has gone into administration!
Once the Wine darling of the high street. Oddbins has struggled in recent years to regain its position as the UK’s top independent.
The company was purchased in 2008 by UK based company Ex Cellar from French giant Castel. Castel's steward ship of Oddbins was widely regarded as a disaster and hopes were high when it came back into UK hands.
Here is how it was reported in Independent Retail news by: Rosie Davenport 4th August 2008
The Oddbins chain has been sold to specialist wine and food retailer Ex Cellar for an undisclosed sum in a surprise deal announced today. Ex Cellar was founded in 1999 by Henry Young and Simon Baile, the son of former Oddbins managing director Nick Baile, who headed up the company in 1973.
Currently, Ex Cellar has two retail outlets in Ashstead and Paris.
The Oddbins senior management team, including Ayo Akintola, HR Director, will remain in their positions. Previous managing director and deputy managing director, Fabrice Bidault and Eudes Morgan, will be replaced by Young as chairman and Baile as managing director.
Baile said: “This is an exciting opportunity for us – Oddbins is a renowned name on the British high street. Our retail background and my knowledge of what used to make Oddbins great will help drive the passion and innovation back into this business. There will be a short period during which we review the current structure and develop plans for the future. This is a cash positive business with plenty of stock, great locations throughout the UK and passionate staff.”
Reading that you have to ask yourselves what the hell happened?
But safe to say, that in the last few years ‘Every wine that has been bought in a UK supermarket is a bottle of wine that has NOT been bought from Oddbins!
Just goes to show that ‘Success is a journey. Not a destination.
Who’s next?
The UK goverments measure, and rises in the price of glass and fuel to make and transport bottles, are giving the trade a hangover!
Next time you are thinking of choosing the £14 bottle of house red in your favourite restaurant, you may want to reconsider once you know how much the producer got for the wine itself.
Recently one of Bordeaux's more colourful wine producers lifted the lid on how a bottle of wine bought for £1 from a cooperative producer ends up costing £14 or £15 in a UK restaurant.
In a bid to highlight the detrimental impact a recent duty rise is having on the wine trade, Gavin Quinney, the owner of Château Bauduc, set out exactly who gets what out of the £14 you pay for a bottle of house wine.
The figures will certainly surprise many regular restaurant goers, or home wine buyers. After storage and distribution costs are deducted, the restaurant and wine merchant have added their mark-up - and more importantly the government has taken its duty and VAT - only £1 is left to pay the producer who worked all year to make and bottle the wine.
Quinney claims the increase in duty on wine - now makes the UK easiley the most expensive place in Europe to buy wine. "The pound has slumped against the euro while the cost of wine at source, the glass to make the bottles and fuel prices have all shot up - and the government added further duty when prices were already under [this] huge pressure."
It is widely expected that the chancellor will put at least 10p on a bottle of wine in the forthcoming budget.
"Duty on a bottle of wine is now £1.61, with VAT on the duty as well as the wine. There is no duty at all in Italy, Spain and Germany, while France fleeces its "citoyens" for all of 2p a bottle. If you think that at least £2 of each bottle of wine being sold in the UK is now tax, this leaves very little margin for the maker."
He suggests that if there were no UK duty, and if the wine merchant and the restaurant were to make the same percentage margin, the price of the wine - either at retail price or in the restaurant - would be halved.
"That's why wine served in Europe, at this level, is often a fraction of the UK price. The UK has long had a vibrant wine sector which is going to be under threat unless Darling rethinks this crazy taxation policy," he warns.
Another man who has noticed the impact recent price increases have had on the wine trade is Richard Siddle. The editor of Harpers, the trade magazine for wine retailers, says the industry was working on tiny margins and now it's suffering even more.
"The slide of the pound against the euro and the duty increases have been the final nail in the coffin. If you go down the aisles in the supermarkets you will think the 14p duty increase has been largely lost in the system. However, supermarkets still see cheap alcohol as a way of bringing customers through the doors, as long as the government lets them get away with it," he says.
"They are very clever at giving the impression prices haven't risen but, away from the brand names that continue to be discounted, prices are on the up."
The Guardian's wine critic, Victoria Moore, says the duty rise and pound shift has left bargain hunters looking at an ever-decreasing stock to pick from.
"Finding good wines under £5 is beginning to get harder. Competition, shoppers' reluctance to spend much, and supermarket tactics in persuading producers to accept smaller and smaller margins have until recently kept prices right down, even as duty rose," she says.
"In the past, supermarkets tended to absorb duty hikes (or at least force the poor wine producers to do so, thus safeguarding their own profits) but this year 14p a bottle has often proved tricky to magic away.
"I've seen some £5 wines go up to £6 as retailers, forced at last to lift prices, sighed with relief and took the decision to claw back some of the money they were losing thanks to the strength of the euro and inflation."
She maintains the best overall value is to be had when spending between £6 and £9. "This is the point at which an appreciable slice of your money goes into the actual wine," she says.
Roger Ravoir
