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RESTAURANT WINE PRICING – HOW HIGH IS HIGH?

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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