Tired of the mark-up

We have some friends that are wine lovers that we like to go out with and we will often split a bottle of wine with them. But the mark-up is sooooo high. I often find the same wines in the grocery store for 1/3 less or even cheaper! What a rip off!

Anyway, we have decided to try some of the many BYOB restaurants in our area, many of which don't have a corkage fee. If I'm going to pay $30 for a bottle I'd like it to be worth it.

Just a little rant I needed to get off my chest.

Ronica
An ongoing issue and as wine enthusiasts it's up to us to patronise those restaurants with fair wine mark-up policies (i.e. not using big wine mark-ups to subsidise cheaper food prices). BYO is great and a flat $X per bottle policy is often good value for both restaurant and customer.

I've seen wine charged at 4 times retail myself, but have also heard of 7 times retail (in both instances for current vintage wines). I've always judged double retail as a benchmark. Cheaper than this is worth patronising. More expensive is worth avoiding. Maybe better though are the policies which effectively charge a flat $ mark-up to a wine. E.g. a $10 retail wine becomes $25 in the restaurant, but a $40 retail bottle becomes $55 in the restaurant. The more expensive wine offers the same profit for the restaurant (actually more as they don't pay retail prices), but also offers the wine drinker a proportionately better deal.

Other issues to be considered are quality of glasses, decanters, etc along with quality of advice. A wide range of wines, including older vintages can demand an additional premium, especially in the latter case as wines bought from auction that turn out to be faulty, will mean the restaurant can't claim a refund from the supplier. Finally if the building is particularly 'prestigious' I can understand how a premium would be expected for both wine and food (they have to pay the rent after all).

regards

Ian

Ronica, what Ian said.

The one upside to buying wine in a restaurant is that you can send it back if it is corked - assuming the establishment is honest.

Personally, I BYO as much as possible, and unless I'm in New York, I never pay corkage.

Once you get to know your area better (find an old salty wine geek) you'll know which restaurants are FreeYOs, or which non-BYO will let you stash wine before dinner, or restaurants with fair wine lists to help sell the more expensive dishes (or in competitive areas).

Best,
Joe

[Jenise]

Ronica, if the wines you see on wine lists are selling for only a third more than market price, then you're actually dining at some very fair restaurants. I for one think they deserve a fair mark up--they SHOULD make a profit on their wine--but there's fair and then there's rape. And some do charge rapaciously.

[James Roscoe]

There are places in the USA that don't allow BYO. We have been invited to dinner in just such a jurisdiction (Baltimore County, MD). What are you going to do? The distributors own the legislature. Our independent governor is about to go down to defeat because he is a Republican in a Democratic state (to say nothing of the Bozo in the White House). The next governor will cow-tow to all the traditional lobbyist such as the distributors and nothing will change. Even the Washington Post endorsed the Republican candidate (Bob Erlich). So I am stuck with mark-ups that usually exceed 50% or more. Fortunately someone else is treating tonight.

Rant over.

I agree that restaurants need to make a profit, but when I see Beringer White Zin for $10 a glass I ( a wine that is $4.75 a bottle at Wal-mart) I am taken back a little. For a special night out w/ friends, I'd rather spend that money on an entree that is a little more pricey and bring a wine that is also more than I would usually spend, but not 3-4 times retail.

This is a tough question. Even as a full time student with a limited wine budget I agree that the restaurants are entitled to a certain mark-up: I would imagine that restaurants are very expensive to run. Yet it is annoying to see that in some places a glass of wine costs the same as the bottle in retail.

There aren't many restaurants that I go to in Helsinki, but one has what I believe to be a great policy. BYOB is illegal in Finland, but if it were legal I'm sure they would allow it. But they have the next best thing. They tend to have very fair mark-ups for the "geeky" stuff, but normal mark-ups for the cheap-crap-wines-by-glass. So I can get a glass of good Muscadet for 5€ (very fair for Finland, where the only Muscadet in Alko costs almost 15€), yet if you wan't the Cheap Chilean Cab, you pay 7€ (a bottle is 9€ in Alko). The list is almost exclusively of the "geeky" variety, and they have superb bargains in some wines: if you like Grange, they have some early 90's vintages for less than the cheapest price on wine-searcher! This is the sort of place I'm happy to frequent. I know they'll make a profit selling the wines at the prices they do, but the mark-ups are very fair and sometimes the bottles cost less than they do in retail. Sure this can be thought of as elitist, but I think it encourages people to try new wines - and it is a haven for all of Finland's wine lovers.

Otto
I suppose the restaurants are helped by the wine shops already having their own mark-up .

Are restaurants themselves allowed to import the wines they want, or are they tied to Alko as well? It sounds like they might not be, which might explain how such places would do very good business.

How about auctions? I presume the auction houses aren't allowed to sell alcohol.

It seems the law isn't set to curb drinking, but more to control what wines/beers/spirits you do drink (and of course to ensure the government makes it's income).

regards

Ian

[Jenise]

Ronica, I agree that $10 for a glass of white zin is insane. But I didn't realize you were comparing by the glass restaurant prices to 750 ml store prices. Sorry for the misunderstanding!

Jenise, originally I was talking about bottle prices and I didn't realize that a markup 3 times retail was considered fair. But I'm glad to know that we agree that $10 for a glass of white zin is crazy.

Otto
I suppose the restaurants are helped by the wine shops already having their own mark-up .

Are restaurants themselves allowed to import the wines they want, or are they tied to Alko as well? It sounds like they might not be, which might explain how such places would do very good business.

How about auctions? I presume the auction houses aren't allowed to sell alcohol.

It seems the law isn't set to curb drinking, but more to control what wines/beers/spirits you do drink (and of course to ensure the government makes it's income).

Restaurants are allowed to import their own stuff - which is probably the reason why Carelia has such a great list. Auctions are illegal. Of course the only reason for the monopoly is that the government gets lots of money from it. I don't mind that - I do get cheap healthcare and even Uni is almost free! - but I do wish there was someone competent who would decide what wines and beers and spirits are taken up for sale.

I have a general question: I've read lots of complaints about the markup on wine in restaurants, but can't ever remember seeing a complaint about the markup on beer or liqueurs or other alcoholic drinks.

Those markups are generally the same and often much, much higher than on wine.

Why are people more upset about the markup on wine?

Regards, Bob

Bob
Fair question.
Maybe it's because a wine is considered a companion to the meal, whereas beers / spirits are more of an optional extra. It's very rare I'll have either in a restaurant, with beer reserved for when I'm appalled by what I see on the wine list!

Maybe we're also used to the rip-off of spirits in pubs/bars, so restaurants don't seem out of kilter.

With beer, our biggest rip-offs are nightclubs/trendy bars and comparitively restaurants are cheap.

regards

Ian

[Jenise]

Well, I don't consider 3X retail fair at all--but 1.5, yeah. And I can go 2X if it's a bottle with a little age on it or if there's a good sommelier on hand whose paycheck must be supported. More than that feels wrong. And worst of all, a majority of restaurants mark up the lowest cost wines more than the higher cost wines. When I go out, I often buy a more expensive bottle simply because it's greater value: I'd rather pay $65 for a $50 bottle than $30 for a $15 bottle.

Interesting points, Ian.

In New York City there seems to be a fairly consistent price structure for beer and mixed drinks: a beer is US $5–7, while a cocktail is US$10. A tip of US $1–2 is expected per drink. You'll see that sort of pricing all over town, with some variation for the sizes of glasses and so on -- especially tony joints charge more of course, and some of the seedier or neighborhood joints charge less.

But it's almost as if there's a general understanding on what the traffic will bear.

In those terms US $10 for a white zin seems a little pricey -- but US $8 would seem "fair". After all, you get twice or more the alcohol per glass than with a beer.

One factor seems to be the much greater variety of wines on offer -- it's much tougher for a retailer to dispense different sizes of glasses of wine and still maintain a margin that will allow the restaurant or bar to survive.

Regards, Bob

Can't remember the last time I patronised a restaurant (here in Australia, that is) that didn't allow BYO.

My wine tasting buddies have, from time to time, been able to book a "top" restaurant with a "supposedly" strict "NO BYO" policy by offering substantial "corkage" for the privilege of combining the great food with the (generally) expensive wines we like to drink at such occasions. This, in itself, certainly reflects that fact that most restaurants can be "bought". And if, say, six of us bring one bottle of (well-cellared) great wine (for the case of the exercise worth $200 a pop), perfectly matched to six beautifully prepared courses, would you be prepared to pay 20 or even 30 bucks corkage per bottle? I have no problem with such a surcharge, particularly with the percentages of mark-up mentioned above as being deemed "acceptable". The only occasional caveat placed upon us is to discreetly drop off all the wine in question (well) before the event - a damn good idea in any case (to have such nice wine served in the right condition (not shaken up or travel-shocked), at the correct temperature or even perhaps decanted or "Audozed" as per the group's instructions. This procedure worked to a tee with the outstanding sommelier(s) at one of the world's finest restaurant's, Tetsuya's, in Sydney earlier this year - see link below for what we organised/enjoyed!).

http://www.wineloverspage.com/forum/village/viewtopic.php?t=1029&highlight=

Why are people more upset about the markup on wine?

Regards, Bob

Because people don't spend percentages, they spend dollars. (or whatever the local currency might be)
And a 300% markup on wine, in most cases, still equals a larger number of dollars than does even a 1000% markup on a cocktail, or coffee or tea or a soft drink.

That's my theory, anyway.

I'm with John T on this one.

Sure, there is a markup on all beverages, but there's a HUGE difference between paying, say, $3 in a retail store afor a beer and, say, $7 for that same beer at a restaurant, and paying $30 for a wine at retail versus $75.

If I spend $7, I don't feel so bad, but $75 will piss me off considerably.

But guys that's not a fair comparison. In your example, John T., if you bought ten beers at $7.00 a bottle you would spend $70 compared with the $75 you spent on the bottle of wine. The restaurant would actually make more money on the beer than on the wine -- the margins tend to be higher on beer than wine from our experiences here.

The thread has been generally discussing wine by the glass pricing, though. Here's a price list from one of my favorite restaurants; these prices are for quartinos, 250 ml carafes:

V I N O R O S S O
Morellino di Scansano I Perazzi La Mozza 2004 Toscana $11

Nero di Troia Bottaccia Torre Quarto 2004 Puglia $12

Salice Salentino Selvarossa Cantine Due Palme 2000 Puglia $12

Langhe Nebbiolo Valmaggiore Sandrone 2000 Piemonte $17

Sangiovese di Romagna Le Betulle
Leone Contì 2003 Romagna $19

Cabernet Sauvignon Collezione de Marchi
Isole e Olena 1998 Toscana $35

The markup is about 250% over my retail (guesstimating).

This same restaurant sells two or three beers by the bottle -- by memory they run $10 to $12 a bottle -- they don't put their beer and other prices on line. The markup is over 300% over my retail (again guesstimating).

They sell a four ounce pour of Sambucca for $15.00, at least 400% over my retail for that quality.

I'd be interested in seeing whether beer, wine and hard liquour pricing in your areas are similar in terms of markup. Haven't been able to find one in John T's area.

In any event, if I chose beer instead of wine at this place, and had two, I'd not only spend more money, but put more money after their expenses, into the pockets of the restaurant owners.

Generally I buy the wine, not because of the favorable economics, but because I like it better. Sambucca is one of Janet's favorite after dinner drinks, so we do buy that. Again, despite the unfavorable economics.

People bitch about the markup on wine all the time -- even in this restaurant -- but I rarely hear people complain about the markup on other beverages.

[The markup on their water is well over 800% based on my retail -- thankfully NYC has great city water. ]

Thanks for chiming in -- I'm really interested in why the markup does upset wine lovers so much. Maybe if I hung out on a beer discussion board or a Sambucca discussion board, I'd read the same kinds of gripes.

Regards, and thanks, Bob

The rule of thumb (at least in this part of the world) is that for a glass pour, the price is the wholesale cost for the bottle. So, a bottle that costs $6.99 (and retails at $10) would be $7 a glass. The rationale I heard is, if you open a bottle of wine for a glass pour, you put the whole bottle at risk of spoilage if no one else orders it in the next few hours, so you need to cover your cost right away. If the restaurant gets a second order, it pays for the stemware (breakage) and service, and maybe a little profit. Third thru fifth pours, if you can get them, are mostly profit. Doesn't sound so bad to me, explained that way.

For me the diner, problems are that many restaurants use poor quality stemware, which I don't like using, but even more importantly, an over-$10 glass pour is a tough sell, so I'm stuck choosing between a roster of under $15 (retail) wines to drink. That's often no fun. It takes a really great wine buyer to stay under that price limit and still provide an interesting glass pour list. I see very few places that can do that, so I eat at home a lot!

Dave

My favorite local restaurant, a newcomer to the area with frankly San Francisco quality fooid has for some strange reason not acquired their alcohol license yet! No charge! The glassware is not fancy, the servers sometimes struggle with the wine, but you know, if I can bring the fruits of my collecting hobby and open it with fuzed Cafe's unbelievable grilled New York Strip with Gorgonzola Butter, I am very happy.

I don't mind paying $10 or evebn $15.

But guys that's not a fair comparison. In your example, John T., if you bought ten beers at $7.00 a bottle you would spend $70 compared with the $75 you spent on the bottle of wine.

Well, 10 beer is a lot of beer - if you were to buy that much beer, you'd probably need at least 2-3 bottles of wine as an equivalent - that's $140 or $210. $70 still looks better!

Bob
No arguments on the spirits - over here it's probably a 500-1000% markup!

I think the volume may be the issue where beer and wine separate. Two beers with a meal would be plenty for most people. Half a bottle of wine is probably the direct comparison (in alcohol terms as well?). Those beer prices are pretty steep though! I'm quite impressed by the wines on the list however, which although they're making good profit, IMO offers good value at the lower end for the customer as well.

Dave
wrt the theory about pricing glass price vs. wholesale bottle price, then I'd be happier to accept it if they offered a sharp price for the bottle (e.g. $8 a glass or $18 the bottle). If they want to use that justification, then they need to back it up with an attractive per bottle price IMO.

[David M. Bueker]

Bob,

There's a reason I only drink water/iced tea/soft drinks when I cannot BYO. All alcohol pricing is crazy. Now I went to a local pizza place Friday with my wife and got a 16 oz. Sam Adams draft for $3.75. That doesn't bother me.