This is the parable of the bottle of wine that promises so much and delivers so little. It begins with my mother who called to say she'd been given a bottle that looked very impressive. What was it, I asked.

''Oh, I knew you'd ask that. I don't know. It's a New Zealand sauvignon blanc. That's good isn't it? And it's from Marlborough, which I know is good too. [Heavy sigh] All right, I'll go and look… It's called, I don't know how to pronounce it but… Wairau Cove.''

I'd never heard of it but as it turned out I got to try it the very next evening when my friend Olly brought a bottle to a dinner, saying he'd ''bought it for a fiver, reduced from £10 so it ought to be fantastic".

Oh dear. This wasn't auspicious. Wine sold at "half price'' is rarely worth any more than you pay for it, and sometimes not even that.

The psychology works like this: even though many of us are suspicious of ''half-price deals'', since they're usually created by hiking the initial price so high that it can be dropped again, we still have a hazy idea that hidden away in the £5 we are not forking out there must be some sort of bonus.

What bothered me even more was the New Zealand connection. This country isn't known for discounting heavily. Instead it forged a reputation based on quality, persuading us to spend a bit more to buy a mouthful of its clean, green land, as the slogan goes. New Zealand wines commanded a higher average bottle price here than any other country's wine and the premium worked in our favour, too: we paid for good wine, we got good wine, a state of affairs more unusual than you might think.

Admittedly, some were better than others, but by and large New Zealand, because it hadn't rushed to supply supermarkets with low-priced, undrinkable tat, was a brand you could trust.

The erosion began in 2008 when a huge harvest led to a grape glut. Wine, much of it still good, was sold off cheap. Problem: once you introduce people to cheap, they start expecting it. Result: that's what they get, often at the expense of quality.

A year ago we paid an average of £6.43 for a bottle of New Zealand wine. Today, thanks to increased discounting, it has dropped to £6.02 per bottle (still way ahead of France, its closest competitor at £5.01, or the general average of £4.39).

Wairau Cove (which I discovered is sold at Tesco) – now back up at £9.99 – is as good an example as any of the sort of NZ sauvignon blanc £5 buys you. The best I can say about this wine is that it had a strong elderflower taste and would have been a brilliant buy to add to a punch made of cordial, soda, wine and lemon juice.

As a glass of wine it smelt tired, had lost its fresh zing and had the starchy, watery taste of slices of raw old potatoes. At dinner, I noticed my friends trying small sips then abandoning it for something – indeed, anything – else on the long, crowded table.

If you can't rely on the name of New Zealand to guarantee the quality of your wine, you end up having to play detective and here, besides the offer, there were two big clues that all might not be well.

The first was the name: Wairau Cove is neither a winery nor a place. It might sound familiar because Wairau Valley is a subregion of Marlborough (incidentally, asked if the grapes actually come from there, Tesco could only say that ''the vast majority of them had") but Wairau Cove doesn't actually exist. The second was the small print on the back label that indicated the wine was bottled in the UK. Together these two clues point in one direction: bulk wine.

Bulk wine is wine sold off in liquid mass by co-operatives and wineries who don't want to bottle it themselves. In the case of established wineries this might be because they want to get rid of tanks they don't consider good enough to sell under their own label, or because they have a surplus from a rapidly ageing vintage they need to jettison before the next one comes on-stream, or for some other reason.

With Wairau Cove, the bulk wine comes from several sources but there are four key suppliers. Tesco refused to say who but I understand these include Pernod-Ricard (whose Montana – or Brancott Estate, as we must now call it, but that