Obviously it’s important that this “basket” represents consumers’ typical purchasing patterns so it is interesting to learn that the index is being changed to measure the price of a bottle of rosé wine, rather than bag-in-box wine.

Rosé sales have been in rude health for a number of years. Historically rosé has been seen as a really seasonal product, as dependent on summer sunshine as Pimm’s, barbecue charcoal and ice cream. Yet despite last year’s dismal summer rosé sales continued to grow.

Partly of course this is fashion, but I think it’s also a reflection of considerably better winemaking and attention being paid to rosé wines. They are no longer a way of using up black grapes not deemed worthy for turning into red wines, but a serious expression of winemaking in their own right. A couple of traditional Majestic favourites have always offered real class (Château de Sours springs to mind) but I’ve been really impressed with some of the new wines that have arrived in recent years.

Yesterday we received the new vintage of Château Sainte-Marguerite from Provence, a region steeped in rosé-making tradition, but in this case very much the epitome of a modern rosé. There’s a lovely soft fruitiness, and the palate is fully dry but with a rich texture and length that shows real class. £9.99 would historically have seemed unrealistic for a rosé but this is worth every penny.

(As an aside, you should also take a serious look at the superb white from Château Sainte-Marguerite. Made from the uber-trendy Vermentino grape it is absolutely delicious; lightly aromatic and beautifully rounded in the mouth, perfect for spring and summer salads. Although the two varieties are not related, to my mind it’s not unlike a good example of Galicia’s Albariño.)

Until recently one of the more predictable tasks at Christmas was sending vans to tour the City’s financial institutions and distribute high quality champagne in large quantities. That of course is history, at least for now. Sales of champagne in particular have been hard-hit by a combination of the wave of poor economic news, strengthening of the Euro and cost rises at the cellar door.

However, we were really pleased to see our traditional ‘residential’ customer base out in force in the few days before Christmas, with sales to private customers rather than businesses holding up well. We’d have been stupid not to foresee that December would be tough, and we were ready, with lots of great wines and excellent offers. Despite the supermarkets seemingly being prepared to give some products away our combination of quality products and good service won through. I think the FT’s analysis was spot on.

We were a good retailer in November, worked hard in December, and are still a  good retailer in January. That’s not really news to be honest, as it’s what we’ve been doing for years. The winners in 2009 will probably be the customers, who will punish retailers who don’t deliver.  Majestic however, will be happy to oblige …

The Government will increase the overall duty on alcohol from 1 December so that the total VAT and duty remain broadly unchanged following the reduction in VAT to 15 per cent. The increase in duty will be maintained when the VAT rate is returned to 17.5 per cent in January 2010

While perhaps slightly disappointing from one point of view, it does mean that there is no reason to hold off from stocking up for Christmas. Unlike electrical retailers (which must be pretty quiet this week – would you want to buy a television today when you know it’s likely to be significantly cheaper next week?) we can now concentrate on getting ready for the December rush. Our message – it’s business as usual. Do your bit and get out and shop!

When you read that there has been x pence (insert the final number) added to a bottle of wine, what won’t be made clear is that we also have to pay VAT on that tax. This means that when a customer buys wine they use their taxed income to pay a tax, with a further value-added tax on top of that! All this means we are holding our breath until 12.30 …

… [Update, 1.45 PM, Wednesday 12th March] The numbers are now available following the Chancellor’s speech. Duty on still wine rises by 14p per bottle (remember this is a rise in the cost price to us and all our competitors, not simply the retail price), 55p on spirits, 4p on a pint of beer and 3p on cider. Not perhaps as bad as we feared, but still punitive.

… [Update, 10.04 AM, Thursday 13th March] Some good news. Although the duty increase applies from midnight on Sunday, Majestic will not be changing any prices until at least 7th April. Despite our best efforts there will have to be some changes thereafter, so our recommendation is to shop now and beat the budget.

Britain has one of the highest levels of tax on wine in Europe and since you are likely to hear a lot about duty and the price of wine over the coming months it’s worth explaining how the different charges work.

Firstly, excise duty is currently £1.33 per bottle (or £1.71 for sparkling wine). On wines from outside the EU, a further tariff (the Common Customs Tariff) is also payable, which varies between 7p and 10p depending on alcoholic strength (17p for sparkling wine). As retailers, we pay these charges at a flat rate for every bottle we buy, meaning they form a far more significant part of the cost price of cheaper bottles than more expensive bottles.

The next significant tax element is VAT, which works out at about 15% of the retail price. We price wines based on their cost to us, and so effectively VAT is charged on the duty as well!

The effect of this tax regime is that the more you pay for a wine, proportionally less goes to the tax man. When you pay £2.99 for a wine (from Europe), 45p is VAT and £1.33 is duty, a total of £1.78 in taxes – very nearly 60% of the total. Trade up to a £3.99 wine and the taxes total £1.92, or 48% of the total. At £4.99 you’re paying 41% in taxes, at £9.99 it’s 28% and if you splash out on a £19.99 wine “only” 22% is tax.

I’ll hold up my hands here, you’d expect a wine retailer to suggest you pay more for your wine! But remember, the less that goes on tax, the more goes in to the production of the wine itself – very very roughly, the actual cost of the wine in a £3.49 bottle is half that of a £4.99 bottle. Spending just 50p or £1 more can make a significant difference to the quality of the wine you get.