Prices have been edging up, so is it still possible to find decent wine at a budget price? Look to the German supermarkets – or buy half bottles

There are few things in the world more dispiriting than listening to someone whinge about tax. Even The Beatles in their mid-60s pomp couldn't make the sentiments of Taxman appealing. Apologies, then, for bringing up the subject, but if you are even a little partial to the odd glass of wine, there's every excuse to get a bit disgusted of Tunbridge Wells about the way it has been taxed in the past few years. As the Bordeaux-based British wine producer Gavin Quinney points out in one of his incisive blogs, duty on wine has risen by 46% since 2008. In the eight years before that it had risen by 15% in total. With VAT now at 20%, it means the total tax take on a 75cl £4.99 bottle of wine is double what it was a decade ago, at some £2.73, or 55% of the total cost. When you factor in transport and retailer and supplier margins, less than 90p is going to the producer to cover the wine (including the bottle, cork or screwcap and other packaging).

Because duty is the same on every bottle, the more you spend the higher the percentage of the total bottle price goes towards the wine itself. Or to put it the other way round, the less you have to spend, the more tax, as a proportion, you pay.

For the many people whose squeezed weekly or monthly budget just doesn't stretch beyond £5 a bottle, this is bleak news. Quality below £5 has plummeted in the past four years, while the kind of wines that had been stuck at the £4.99 price mark for the better part of a decade have now inched ever higher. And things will get even tougher for the budget buyer if the government's plans on minimum alcohol pricing become law.

So is it still possible to find decent wine within a £5 budget? If you look hard enough, then the answer is yes, just about. I'd start with a visit to one of the German discounters, Aldi and Lidl, whose wine departments, while limited in scope, have improved considerably. Although it doesn't quite live up to the name, Aldi's newly launched Exquisite Collection Touraine Sauvignon, for example, is a very decent crisp Loire white for £4.99. Of the mainstream supermarkets, Asda has the highest sub-£5 hit-rate.

Another option for the cost-conscious is to play around with size. Although the range of wines available in larger format bag-in-box is nothing like as inspiring as it could be, buying a 3-litre box of one of the better examples, such as the juicy, brambly Tesco Simply Côtes du Rhône (£14.99, 3 litres), can save a few pennies-per 75cl on the bottled equivalents without any loss of quality, and it will keep for weeks in the fridge.

More promising in terms of range are smaller bottles. A 50cl or even 37.5cl bottle provides just the right amount of wine, in my household at least, for a school-night dinner for two. Most retailers stock a selection – there's even an online specialist, halfwine.com – and many come in at under a fiver.

The idea is to drink less wine but of better quality, which is pretty much what the government says it wants to encourage. Although, as ever with this lot, it seems unlikely the millionaires dispensing the advice will feel compelled to follow it themselves.

Six decent bottles under £5

Antonio Barbadillo Palomino Fino Tierra de Cadiz, Spain 2010

(£5, Adnams)

The Barbadillo firm is a specialist in manzanilla sherry, but this is a (very) dry white wine for seafood or pre-dinner sipping made from the same grape variety in the same part of southern Spain. It's breezily fresh, light and just a touch nutty and salty.

Sainsbury's House Muscadet, Loire France NV

(£4.79, Sainsbury's)

Another one for seafood, particularly shellfish in this case, and a very creditable stab at conveying the classic maritime freshness of this region around Nantes near the Atlantic coast, with a hit of lemon that stays just this side of tart.

The Wine Selection Marsanne, IGP Pays d'Oc, France 2011

(£4.98, Asda)

Rebranded to fit in with Asda's new Wine Selection range, this is a wine that has been punching above its weight in its various guises for several vintages now. There's a touch of honeysuckle alongside some apple and peach in a midweight white for roast chicken.

Simply Garnacha, Campo de Borja, Spain 2011

(£4.49, Tesco)

The underrated Campo de Borja region in northern Spain is generally my first port of call for cheap red wine, with the prolific Bodegas Borsao often the name behind the own-label. Here the old garnacha vines deliver plenty of bright juicy-jammy red fruit.

Aldi Italian Pinot Noir, IGT delle Venezie, Italy 2011

(£4.19, Aldi)

Pinot noir, or pinot nero as it's known in these parts, is a tricky grape to get right at any price, and while this won't have Burgundy's top winemakers losing any sleep, it has a fresh and fleshy cherry-scented, pasta-friendly appeal.

Mont St-Jean Corbières, Languedoc, France 2011

(£6.99, or £4.99 if you buy two bottles, Majestic)

France's largest wine region, the Languedoc, makes a hell of a lot of wine, some of it great, much of it undistinguished but, at the two-bottle price, this sweetly black-fruited and subtly herbal red for sausages is a cut above the average local plonk.

For more ideas on how to eat and drink well for less, don't miss the Observer Food Monthly this Sunday