0 comments / Posted by Mister Penguin

Singapore wine tax duty myth

 

Most people I know believe that Singapore government is making tons of money on alcohol taxations. This is FALSE. Singapore is one of the few countries in Asia (if not the only one?) to have alcoholic beverages taxations rates based on the alcohol concentration and not the goods price. Thus, for a standard bottle of red wine with 13% alcohol and 0.75l volume, tax duty represents only 8 SGD. And this is no matter whether it is a “Vin de table” or a bottle of Romanée-Conti. You can buy some here by the way.

 

 Bustying Singapore Wine Taxation Myth

How much are shipping, transportation and storage cost in Singapore?

 

Maybe you will think that the high price is due to other fees such as shipping, delivery, and storage then? This is partially true. Singapore hot weather makes it impossible to preserve your wine quality without having full-time air-conditioned storage facilities. But this only represents 3 to 4 dollars per bottle. Mother earth, please accept our apologies for this over-consumption of energy. I truly hope that one day, someone will provide eco-friendly storage facilities powered by green energy.

 

What about shipping to Singapore? Depending on how much volume of wine you are importing and how urgent is it, you can get your wines shipped from France to Singapore for a very cheap price. For instance, it will cost 0.5 SGD per bottle by sea cargo or 2 SGD per bottle by air freight. Last but not least,  when you buy online, a standard delivery costs only 8 SGD per delivery

 

 

What is the cost of goods sold for the wine your purchase then?

COGS calculus
Tax duty +8 SGD
Shipping + 1 SGD
Optimal Wine Temperature Storage + 4 SGD
Delivery + 8 SGD
TOTAL = 21 SGD + Cost of Purchase

The cost of goods sold is on average 21 SGD, plus the cost of purchase. For instance, if your cost of purchase is 3 SGD, your cost of goods sold will be 25 SGD.

 

This means there is an incompressible cost of 21 SGD on every bottle. By buying your bottles by cases (six bottles), you can reduce it to 14 SGD by allocating the delivery cost. But in our example, we chose to base our calculus on the average consumer’s purchasing behavior.

 

 

So why are wines damn expensive in Singapore?

 

It’s not tax duties neither logistic costs. Maybe all wine distributor and retailers know each other? Probably not. Singapore wine market is ultra-competitive and a huge amount of money is spent on branding and promotions in order to beat competitions.

 

Do you know how many bottles need to be opened for free during tasting events? Or how much does it cost just to rent a decent venue in the CBD? How many staff do you need to hire to serve wine, clean the tables and provide animations? No one is mutualizing resources and that’s why unnecessary money is spent on marketing and branding.

 

If you want to sell your wine on a marketplace like Lazada, they will charge you a hefty 15% on the selling price. And conditions imposed by supermarkets like Cold storage for wine importers to sell their wines in-store are just insane. Plus, if your wine retailer buys its wine from a distributor in Singapore and not directly from the wine producers, you can add up a little extra 50% margin for the middlemen.

 

Why it is not worth buying low-end wines in Singapore

 

Low-end wines prices vary from 25 SGD to 40 SGD. The cost of purchase of a wine bottle tagged at 30 SGD in a supermarket is probably worth only 3 SGD. This also means that 50% of what you are paying is this incompressible importing cost. The other 28 SGD you are paying are mainly taxes, storages, distributions fees and several middlemen margins. So the cheaper is your wine, the more you are paying for other costs than the wine itself. When you purchase a bottle of wine at 80 SGD on our website, this incompressible cost represents only 25%.

 

That’s why at Wine & Chill, we choose to sell upscale wines through the online channel only with little money spent wisely on marketing. We want our customers to spend their money on purchasing quality wines, not on inefficient importing process. We also make sure that our wines are stored at the perfect temperature so it doesn't get spoiled. If you are interested in knowing more about fine food purchase in Singapore. feel free to contact us. I have a few good addresses to get nice food for wine pairing!

 

 

But you just want to get drunk?

If that’s the case, I know some very good bars that offer free flow of house pour wines in Singapore. Feel free to drop me an email to know more about it. However, if you are looking for quality wines and worth their value, add wineandchill.sg as a favorite to your navigator.

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