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RESTAURANT WINE PRICING – HOW HIGH IS HIGH?

Cary Feibleman • 11/11/17        Print This Post Print This PostComment Bookmark and Share

It’s truffle season and the best restaurants in the country are offering special multi-course dinners offering the rare, expensive fungus. In planning one dinner and reviewing the online wine list of a famed San Francisco three star Michelin restaurant, I was struck by the inflated pricing of the bottles. Newly released 2013 and 2014 Burgundies, for example, are marked up 300-400%  above retail.  Older bottles from random vintages are equally expensive. Whenever one criticizes restaurant wine pricing policies, defenders always point out the costs of inventory, storage, cost of glassware and decanting service. We all understand it is expensive to run a restaurant and most owners say they only break even on the food.  However, in this era of transparency I would like my bill to show the actual food production and service costs with desired margins, rather than have the house hide its costs in inflated wine pricing.

In earlier days grand old American and better European restaurants featured multi-vintage collections of great wines and it was clear that care and maintenance of those bottles factored into the increasing cost for older bottles.  Few American restaurants seem to have these library collections anymore, so it is hard not be insulted to be offered a St. Aubin at $250 when it wholesaled last year at $35-40 and appears in retailers’ shelves for $60 or less.  Many wineries want their bottles on the lists of prestigious Napa, San Francisco and New York restaurant lists and offer special “sweetheart deals” to make certain they appear there.  Thus keeping costs even lower. How can the restaurant guest not feel taken advantage of when he sees the wine list?

Another trend is to limit bottles brought into restaurants to one per couple or to have an escalating corkage fee.  I would prefer to bring in as many bottles as my table wants to consume and pay a fair fee.  Corkage used to be determined by the price of the cheapest bottles on the list.  That seemed fair as you were using the restaurant’s stemware and a server spent time opening and pouring your wine.  A gradual escalation for multiple bottles even seems fair, but when the price ventures into the $150 range per bottle, yes, I have been charged that in Napa, you have to say to yourself, “Boy, this wine and food had better be good!”

Is it any wonder that most trendy, new, hip, non-Michelin star seeking restaurants are composing lists of wines no one has ever heard of before?  A Cote in Berkeley features a broad selection of wines from the former Yugoslavian countries and from vineyards throughout Central Europe. Tar and Roses in Santa Monica skews towards more familiar European wine regions, but their selections are unusual, but interesting—“a red sparkler to start your meal, sir?” Odd, but curiously good with the wood fired, stove cooked offerings.  Further, many of the these restaurants pride themselves on featuring lists whose wines seldom approach $100.  Great for consumers, but you are often still paying a 300% mark-up, but the sting has been taken out and you got educated on a whole new region of wines you never previously tasted—reds from Mount Etna and native species from Greece and Hungary.

However, what to do if you wanted that La Mission Haut Brion or Bonnes Mares?  I propose eliminating multipliers in wine pricing, or at least scale them back.  At the end of the day it should come down to how much money you generated per hour.  If a table needs to show $200 per hour profit, then the bottles of wines should have $100 per worked into their cost.  The said La Mission which cost $250 at wholesale, now appears on the list for $400, rather than the crazy $1,000.  Your chances of selling five of them in the next week probably went up 500%!  Some restaurants in the past have adopted this approach.  I would like to hear from them how it worked out.

Restaurants should be fair, calculate the food costs and desired profit and charge for it on the bill and then present a fair cost for the wine. It’s up to the consumer to decide if it is worth it.  I’ll accept 100% wine mark-up, but anything more when the bottle has sat in the restaurant for less than a year seems over priced.

In Vino Veritas,Sig

Cary Feibleman

 

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2 comments for “RESTAURANT WINE PRICING – HOW HIGH IS HIGH?”

  1. Yes indeed. While burgundy prices have rocketed, restaurants have kept their multiplying factors, hence making monstrous margins for little service. This means wine drinkers sponsor non wine drinkers.

    So, on Friday night, we had a Jobard Meursault 1er cru les Poruzots with pata negra at home before heading to the restaurant (this wine would have fetched 200-300 £ min) where we then had diner without wine… and without starter… Silly!
    But mostly, we are now avoiding restaurants …except in the December-January period when top Restaurants offer free corkage and for very very special occasions. We then bring really top wines to go with top food.

    Posted by Antoine | November 12, 2017, 6:41 am
  2. Wine pricing is a conundrum and I would like to see restauranteurs and veterans of the industry justify the current practice. A further insult which most barservers will admit to is the staggering multiples applied to wines by the glass. These carry the highest margins in the restaurant, 300-400% is usually where they START, and the wines are frequently the crummiest on the list.

    What makes this further insulting is that the Cruvinet has been around for 20+ years, the storage system allowing 10-30 bottles to remain open and pourable without oxidation for days, and for those restaurants that don’t want to pay for the set-up, smalller, separate bottle systems with argon. Chefs and restaurant owners are trying to put on the table the best food they can and provide a great dining experience. For most consumers that includes a good, complementary bottle of wine. In most cases those bottles will be less than three years old and restaurantgoers know what they could have or still can buy them for at retail where I might add they already represent a 30+% boost in cost from wholesale which is the figure the restaurant buys them at.
    So double the wholesale cost. Make the $30 bottle a $60 bottle. If it is a $75 retail bottle, actually $55 wholesale, charge me $100, the house practically doubles its money.

    From this point on I think the restaurant needs to transition to wine bottle price based more on covering its real costs rather than further penalizing a consumer who wants to dig deeper into his pocket to try a special bottle.

    For instance, factoring in how rare the bottle is to replace, if an exceptional bottle cost the restaurant $200, I propose charging $300, if it cost $500, charge $750. I think these are fair prices for all concerned and I think restaurants would see their wines sales go through the roof.

    Posted by Cary Feibleman | November 12, 2017, 7:27 am

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