If you're thinking of splashing out on a bottle of bubbly to welcome in the New Year, then you may be chuffed to find you are also performing a public service.

When the shop assistant rings in your sale, the State's tills are also ringing up a substantial contribution.

The excise duty on a standard 75cl bottle of champagne or sparkling wine is £3.22. This compares with £1.61 on a bottle of wine. Then there's the VAT, due to come down from 21 per cent to 20 per cent from January. VAT is charged on the full price of a bottle of champagne or wine, including excise duty.

So, if you spend £20 on a bottle of champagne, you are donating £4.20 in VAT and £3.22 in excise duties. Add in the cost of packing, distribution and trade margins and you begin to get an idea of how much of your money is actually going towards the cost of the wine.

Still, we are part of the EU, and everyone else is paying up, too. Right? Not so, according to the Wine Development Board of Ireland. In the UK excise duty on sparkling wines is £2.07, in Denmark £0.83, in France £0.05 and nil in Italy, Spain and Greece. And the comparisons are just as odious when it comes to still wines with duty in France at £0.02 and nil in Italy, Spain and Greece.

Undeterred, we have acquired a taste for wine. The market for table wine in Ireland has risen by 160 per cent from 1990 to 1999. In the same nine years the number of wine drinkers in Ireland has risen by 59 per cent, to 1,156,000 in 1999, according to Wine Development Board figures. That still leaves us at the bottom of the wine consumption league in the EU. Still, we can console ourselves that we're way up the price league.

Last year the sale of wines from the Champagne region was huge, as importers and retailers stocked up for the millennium. But consumer demand didn't quite shape up, and a lot of importers were left with champagne, particularly the prestige types, said Mr Jim McCabe, the owner of McCabes Wines.

If you haven't bought your bubbly for Sunday night, you may be cheered to find prices this year did not keep pace with inflation. "Some of the big champagne houses put their prices up 3 to 4 per cent in January, but there hasn't been any increase since," said Mr McCabe.

You don't have to pay a fortune for a bottle of champagne. Superquinn still has bottles left, in some stores, at £16.99. Wine-buyer Mr Michael Donlon said Superquinn also has its own brand (Raymond de Belvol) at £14.99.

Some wine-importers and retailers suggest that anything under £20 won't be very good as the taxes are so high. However, Mr Donlon said: "It's wrong to say a bottle under £20 is no good. I would challenge them to taste it blind. They might be pleasantly surprised. We've had our champagne for nearly 20 years and it's never let us down. We get a good response from customers. If we had customers complaining, we wouldn't continue with it."

Dunnes Stores doesn't have any own-brand champagne this year but is selling Duvel le Roy at £16.99, said Mr David Orr, section buyer in the off-licence department. There are also cheaper sparkling wines (£12 to £14), which he said are as good as a basic non-vintage champagne. He recommends Seppelt Salinger, an Australian sparkler, at £11.99.

Mr Orr reminds consumers that the more they spend on a bottle of wine, the greater the proportion that goes on the wine itself. The most expensive champagne in Dunnes is Dom Perignon at £79.49.

In Tesco, Dom Perignon is the same price. Somewhat cheaper are Tesco's own brands: Tesco millennium (£24.99), premier cru (£18.99), and vintage (£25.99). The biggest seller is Moet et Chandon (£25.79 for the non-vintage; £33.49 for vintage), according to a spokeswoman. "Dom Perignon sells in fewer stores and sales can be numbered in single bottles," she added.

But if you really want to celebrate in lavish style, then Terroirs in Donnybrook, Dublin, has a magnum of 1976 Champagne Salon at £550 or, if a magnum is simply too much, a bottle of Salon (1982 and 1983) will set you back £195.

Mr Sean Gilley, one of the proprietors, said that at the other end of the scale a bottle of sparkling wine, such as Mas de la Dame (£14.50), which is made in same way as champagne but is not from the region (and so can't be called champagne), is of good quality. "Sales of sparkling wine and champagne are very buoyant. Irish consumers are adventurous and they want to try different types," he said.

At Waterford Wine Vault, which offers 24-hour delivery nationwide (waterfordwinevault.com) prices are lower than last year, according to its owner, Mr David Dennison. Offering just one brand, Charles Ellner, prices are down by £1 to £2 per bottle with prices beginning at £22.50 for the non-vintage.

If you're not exactly sure what you're buying when you add a bottle of champagne to your shopping basket, Mr Michael Donlon of Superquinn explained that champagne is a blended wine: "It is a blend from different parts of the champagne region and also a blend of different grapes. A non-vintage wine is a blend of years while a vintage wine comes from one year only.

"The art is in the blending. The average Irish palate is more sophisticated then in the past. Most champagne sold here comes under the description brut, which means it's on the dry side. Years ago, if people were looking for a sparkling wine, they'd look for Asti Spumante. People's palates have changed dramatically. They'd find it too sweet now."

A final plea from Michael Donlon: treat your champagne with respect. "It should be served cold. An hour in the fridge is enough. If it's too chilled, the bouquet will be killed. Have your glasses ready. Please don't shake the bottle. Point the bottle upwards and away from anyone in the vicinity. Hold the cork, and turn the bottle," he advised.