How is it possible that Australian wines could be cheaper in the U.S. than in Australia?

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Dear Dr. Vinny,

I have been told by several people that the Australian wines are more reasonably priced in the U.S. than in Australia. How can that be?

—Brigitte W., Hill A.F.B., Utah

Dear Brigitte,

It's true in some cases. According to Wine Spectator's Australian expert, Harvey Steiman, "Australia imposes a 29 percent tax on wine sold in Australia in the form of a VAT. The tax is not paid when the wine is exported. These taxes are based on a percentage of the wine's value, and the U.S. imposes taxes on wine based on volume. Therefore, the more expensive the wine is in Australia, the greater the savings when it is exported."

—Dr. Vinny

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