European Wine Shops and Porto

[John Trombley]

I just came back a week ago from Europe, where I had a chance to browse the wine stores in Hungary, Austria, and Germany. I took a good look at the 'dessert wines' on offer. In Europe, wine is mostly sold at commodity prices in the grocery stores, and wine bars are often combined with take-out facilities and a good wide stock of wines, particularly in larger cities. This effectively knocks the bottom out of the market for wine stores or bars, becuase everyone just buys el cheapo jug wines from country X at €4 or €5 a bottle equivalent. Essentially cheap Chianti, for example, seems to be available for about 1/2 to 1/3 the US price, when taxes, etc. have been figured in. However, Port and Madiera seem to be expensive. Don't know why, and didn't have a chance to ask, but they were almost as expensive as they would have been in Ohio, which has a stiff excise tax. Does anyone from Europe know the reason for this difference?

On a related subject, the selection seems to be somewhat better than I would find around Dayton, and more areas are represented. For instance, I saw Jurançon and kinds of Malaga, and even bottles of Inniskillin Riesling Ice Wine from Ontario.

[Eric Menchen]

I think there a lot of market dynamics at work here, supply and demand, and what the market will bear.

Yes, you can buy a lot of cheap wine in Europe, for €4 or €5. You can also buy $2 Chuck here, and a good number of other wines close to $5. But I think there are a lot more people in Europe (at least as a percentage of the population) that want to buy an inexpensive bottle of wine to have with dinner. In the US, some of those equivalent (demographically) people aren't drinking any alcohol at all with dinner, or are drinking beer. Having said this, wine consumption in some European countries, notably France, has been decreasing for the past decade or two. Perhaps in France we will see an evolution of the market, with less daily table wine and more occasional but better wine consumed.

[Mads Barnkob]

There is "little to no" market in Europe for Madeira and Port, the great times of everybody drinking it is long over. I guess regional products took its place.

It ended when shippers sent out large bulks of wine to be filled on bottles by the wine merchants, there was a lot of cheating and thinning going on, at last Port lost its reputation as a good drink.

It never caught on again as more than a niche drink or for collectors/clubs. Wines in stores are at most priced double of what you can find it to at the good web shops, it is very rare that I find a vintage port in a Danish physical shop that I buy, even wines on offer are often too expensive.

I can not even request certain vintage years to be ordered home, they say "we have to order a whole pallet and we can never sell it"

[Andy Velebil]

Mads,

While maybe in Denmark it's a bit tough but that doesn't translate to the rest of Europe where Port and wines generally sell quite well. Of course, it is dependent by country as some do better sales than others.

Though....Despite what many in the UK still think their days of buying and storing tons of Port for future generations are effectively over. The Universities are selling off, not buying, stocks of Port as they did in the past. It's just a change in the younger generations and old traditions changing. That is not to say people aren't still buying fine wine and Port to lay down, they are, just not doing it at the same level or for the same reasons as before.

[Thomas V]

There is "little to no" market in Europe for Madeira and Port, the great times of everybody drinking it is long over. I guess regional products took its place.

It ended when shippers sent out large bulks of wine to be filled on bottles by the wine merchants, there was a lot of cheating and thinning going on, at last Port lost its reputation as a good drink.

It never caught on again as more than a niche drink or for collectors/clubs. Wines in stores are at most priced double of what you can find it to at the good web shops, it is very rare that I find a vintage port in a Danish physical shop that I buy, even wines on offer are often too expensive.

I can not even request certain vintage years to be ordered home, they say "we have to order a whole pallet and we can never sell it"

This are the findings from a Danish wine report

The financial crisis impacted the Danish port import a lot. In 2006 and 2007 the gross port wine import was 1.6 and 1.5 million litres. During the crisis the consumption fell with 1.0 million litres per year. Now in 2014 we are sitting at 1.5 million litres of port per year.

So Denmark is back in business buying port at the same level as before the financial crisis and Denmark is still to my knowledge the country in the world with the largest port consumption per capita.

I do agree that most Danish wine shops are overpriced and only have very limited inventories. Also most vendors only distribute one brand as they have an exclusive on import of that brand. That affects the competition and the price. I think most serious buyers use web shops, actions houses, travels or special offers when they make high end purchases.

[A dschus]

I will be in Warsaw and Budapest over the holidays. Any specific shops I should look out for?


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[John Trombley]

Tasting Table/Taste of Hungary in downtown Budapest is a must. I think it's next door to the Hungarian Natural History Museum. Say hello to Carolyn for me.

[Ronald Wortel]

You're generalization of "European" wine prices and "European" wine consumption really doesn't hold, because of the huge difference between countries. There are massive differences in duty rates, having a big impact on prices, and also the consumption pattern varies greatly between the big wine producing countries (that mostly drink domestic wine, eg. France, Spain, Italy, Portugal, Greece) and wine importing countries (eg. UK, Netherlands) and the likes that are in between such as Germany. Therefore, it's not really possible to answer your question with regards to high port / madeira prices, as they are not actually that high in all EU countries. Depends on duty rates, size of market for the product, distribution channels etc etc.

[John Trombley]

You're generalization of "European" wine prices and "European" wine consumption really doesn't hold, because of the huge difference between countries. There are massive differences in duty rates, having a big impact on prices, and also the consumption pattern varies greatly between the big wine producing countries (that mostly drink domestic wine, eg. France, Spain, Italy, Portugal, Greece) and wine importing countries (eg. UK, Netherlands) and the likes that are in between such as Germany. Therefore, it's not really possible to answer your question with regards to high port / madeira prices, as they are not actually that high in all EU countries. Depends on duty rates, size of market for the product, distribution channels etc etc.

Portugal is a member of the EU. Are you sure that Portuguese products have import duties in other EU states? I can see this argument for states outside the EU, however. In addition, some EU countries don't participate in the Eurozone currency arrangement, and so there are exchange issues, say for instance in Hungary and Slovakia, to name two we visited. The countries in which I made these observations are predominately Austria and Germany.

By the way, I was served two very nice wines from the Netherlands in the upscale restaurant affiliated with the Rijksmuseum in Amsterdam. The sommelier seemed to have lots of knowledge about these and they were quite fine and well-made. I tasted two whites and a red--a fine Portugueser.

[Bert VD]

maybe not so much import duties but they have different tax rates on alcohol. here in Belgium they recently (end october) got a lot higher. in the last few days before the change people raided the supermarkets. the isles with wine and especially liquor were emptied out before the prices went up

[Ronald Wortel]

Portugal is a member of the EU. Are you sure that Portuguese products have import duties in other EU states?.

No import duties between EU states but all states have different duty rates on alcohol, some of them very high (eg. UK) and some of them relatively low ((eg. Netherlands, Germany). This makes a huge difference in price. Next to that, countries in Europe are really all very different from each other and you cant't generalize in terms of market because of differences in culture, standards of living etc.

[John Trombley]

I noticed this on the EU website:


Excise duties - Alcoholic beverages
Legislation

Excise duties for alcohol are regulated through two main pieces of EU legislation.

Directive 92/83/EEC sets out the structures of excise duties on alcohol and alcoholic beverages, the categories of alcohol and alcoholic beverages subject to excise duty, and the basis on which the excise duty is calculated.

It also includes special provisions, for example, reduced rates for small breweries and distilleries, certain products and geographical regions.

Directive 92/84/EEC sets out the minimum rates that must apply to each category of alcoholic beverage. It also provides for reduced rates for certain Greek departments and islands, certain regions of Italy, and for Madeira and the Azores in Portugal.

Categories and the minimum rates
Product
Rate expressed per:
Minimum Rate:
Beer
Hectolitre per degree Plato
OR
Hectolitre per degree alcohol
0.748€
1.87€

Wine
(still and sparkling)
Hectolitre of volume
0€

Intermediate Products
(e.g. port, sherry)
Hectolitre of volume
45€

Spirits
Hectolitre of pure alcohol
550€

EU legislation only sets harmonised minimum rates. Member States are free to apply excise duty rates above these minima, according to their own national needs.

Now back to me:

In other words, there is a minimum EU excise tax on fortified products of €45 per hectoliter, plus whatever the member states impose. This may be reduced in some states as for Maderia sold for consumption in Portugal. That would mean an excise of €4.05 on a case of port, sherry, or madiera. Now in Germany, for instance, there is an additional excise of €14.67 per hectoliter. giving a total rate of €59.67 per hectoliter. (€5.37 per case). This seems a most reasonable excise, but of course VAT is added in top of this, so it's hard to comment on the overall tax structure. I seem to remember a VAT in Germany of 20%. Perhaps with the VAT the rate might be similar to that which we have in many of the states of the United States. So let's check this, using my state of Ohio as an example, with a similar wine. For instance, on a case of Late Bottled Vintage worth €240, there would be a VAT of €48 and an excise of €5.37, adding €53.37 per case to the cost. That'd be €3.25 per bottle, a total tax rate of near 22.2 percent.

In Ohio where I live, there is a wine tax on Port-strength wines of $9 per case (Cuyahoga county seems to have a higher rate) but there are also Federal excise taxes on beer and wine. The Federal tax on wine from 14 to 21 percent is 31.4 cents per bottle< $3.78 per case. Adding the Ohio wine tax you get $12.78 per case or about $1.06 per bottle. There is is a sales tax that differs from county to county but in Miami County where i live it is 7 percent. So if I buy a case of LVP worth $240 I'll pay $252.78 time 1.07 equals $270.47. That's about 12.7 percent tax overall. In other words, I can see why the Port in Europe, in this case Germany, looks expensive to me.

Please note that a hectoliter is 100 liters, a case of 750s is 9 liters, thus a case is 0.09 hectoliters (hl). This is the basis I used for the above calculation. And while a Euro is not a Dollar, they are close enough for jazz. If you want to adjust for currency, you can do so, but the ballpark is still close to what I've stated, unless I've made an error.

[Al B.]

Though....Despite what many in the UK still think their days of buying and storing tons of Port for future generations are effectively over. The Universities are selling off, not buying, stocks of Port as they did in the past. It's just a change in the younger generations and old traditions changing. That is not to say people aren't still buying fine wine and Port to lay down, they are, just not doing it at the same level or for the same reasons as before.

Interesting comment as this is exactly what I thought - especially since I was lucky enough to be in the right place at the right time to buy the vintage port cellar from my alma mater Imperial College when they decided to liquidate their stocks of VP since no-one had bought any from them in the past 5 years; all they were selling to diners was LBV.

But since then I have been talking to a number of wine storage companies and they are enjoying a huge boom in business, to the extent that several of them I know of have had to add storage capacity (Berry Brothers, Seckfords, Octavian). The anecdotal evidence is that Universities are indeed buying less port to lay down than they did 30-40 years ago. However, the London Clubs are continuing to buy and consume about the same volume (the Oxford & Cambridge currently offers Fonseca 1985 and de la Rosa 1994 by the glass with a decanter of each selling through every couple of days) while a growing number of individuals are buying relatively small quantities (a case rather than a pipe) and are looking to specialist storage companies to look after it for them since they don't have a suitable cellar at home. It is this growth in the numbers of small buyers which is driving the need for the storage companies to expand and grow.

Long may it continue!

[John Trombley]

This simple question generated much more information than I ever supposed it would. Thanks for all who shared!

[Jeremy R]

Funny, I was just getting ready to post a similar question. I am going to be moving to Germany this summer and was wondering if I should try and buy a decent supply of Port to take with me or if I should just buy it there. Anyone have any experience shopping for Port in Berlin?