How the wine trade works

By Jamie Goode | 20th November 2025

Have you ever wondered just how that bottle or glass of wine in front of you ended there? The UK is a long way from South Africa, California, Australia and New Zealand, but we drink quite a bit of their wine. And travel to Europe’s wine regions, and it’s still quite a journey from there; and of the thousands of wineries, how come some of their wines get here, while others don’t? It’s time to look at how the wine trade works.

Let’s begin with the simplest route to market: direct sales to consumers from the winery. If you visit a winery, you get the benefit of tasting the wine exactly where it was made, and sometimes in view of the vines that grew the grapes that then ended up in your glass. You can buy wines directly from the winery with no intermediary, either in person, or by mail order. Unfortunately, because of UK customs we can’t buy directly from a winery outside the UK and have it shipped to us, but we can buy directly from the ever improving and growing band of UK wineries.

So, what about wine lists in restaurants and wines in specialist wine shops? Here there are a few intermediaries involved. In the UK there is a network of importers and agents who travel the world looking for interesting (or commercially expedient; hopefully both) wines to bring back. They sign up wineries, usually on an exclusive basis, and become their agent or importer in the UK. Sometimes the two roles of agent and importer are combined into one. The agent sells the wine to someone in the UK on an ex cellar basis, taking a commission on the sale of around 7.5%. The person buying then pays to have the wine shipped to the UK, where they will usually store it in a bonded warehouse. When they then remove the wine from this warehouse, they pay duty and VAT. Or they may sell the wine in bond to someone else, who then pays duty and VAT when they remove it. An importer brings the wine back to the bonded warehouse they use and then sells on either bottle or case quantities to a restaurant or wine shop, usually with a margin of around 20-30%. Then the restaurant or wine shop pays duty and VAT, bringing the wine out of bond, and sells it on to their customer, adding their own margin. In reality, the role of agent and importer is blurred a bit, with many acting as both, depending on the quantities they are selling to their customers. But you can see that if a wine shop or restaurant is selling a wine brought in by an importer, there are two sets of margins before it gets to the customer.

What about buying from supermarkets? Here it gets a little more complicated, because there are various scenarios. One of the things that supermarkets are doing more of is private label wine. Also known as buyer’s own brand or own label, this is usually where the supermarket sources the wine in bulk and then gets it bottled and labelled in the UK. Sometimes the wine might be sourced from a producer in bottle and then labelled with the supermarket’s name on it, but it’s more common for the wine to be shipped in bulk. What this means is that a winery puts the wine into a 27 000 litre flextank in a container and ships it to a UK winery. There are quite a few big wineries in the UK, and they take the wine and then bottle it here. If care is taken with filling the flextank, and the container doesn’t see high temperatures during shipping, there are few quality implications. It saves the weight and bulk of shipping all the bottles and packaging long distances.

Shipping in bulk is also used for branded wines, where big companies will choose to bottle in market rather than ship finished product. Typically, the big brands will have direct relationships with the supermarkets, cutting out a margin. It’s common for the relationship to include the supermarket agreeing to stock the brand in addition to the brand owner supplying some own label wine.

As well as own label wine, there are also what are known as soft brands. Here, a supermarket or restaurant wholesaler will buy some bulk wine, have it bottled in the UK, and then make up a name for the wine to make it look like an actual brand. These wines are often used as trade drivers, where they will be listed at one price and then frequently discounted to a much more attractive price. Restaurant wholesalers love these soft brands: their customers don’t want people coming into the restaurant, seeing a branded wine for £40 on the list, and then the customer goes online and finds that a wine shop or supermarket has it for £10. So, if you have seen a pub or restaurant wine list and not recognized the names of any of the wines, it may well be because these are soft brands.

And then we have the convenience sector. Convenience stores sell quite a bit of wine, and often it’s branded wine and Champagne. UK importers sell wine to cash and carry stores, and then they are bought by the retailer and sold with another margin. So, we have one more margin here: importer, cash and carry, convenience store. This means the wines are often at the expensive end, although I have seen some very well priced Champagnes (the houses sometimes need to shift stock at big discounts, so sell at favourable prices through the cash and carries thinking that none of their major customers will notice too much).

If you are looking for the cheapest wines, you’ll find them in supermarkets, because of the way that they get there, with one fewer margin. Inevitably, independent wine shops won’t be able to offer many wines below a certain price, but then again, spend a little more and you can really find something interesting. It all depends on what you are looking for. One piece of final advice, though, is run a million miles from any retailer or wine club advertising the fact that they can bring you cheaper wine ‘by cutting out the middleman.’ The middle person actually does a very important job in terms of gatekeeping quality and finding interesting wine, and they deserve a cut. The retailers who boast about cutting them out are usually high-margin operations who source average wine, list it at high prices, and then make too-good-to-be-true offers. Or they bait and switch with famous wines at low prices, only to then try to sell you something else when these stocks ‘run out’.