Restaurant Wine List Prices

[jgould]

another question: does anyone believe restaurants would sell MORE wine by the glass or more bottles, IF they lowered the prices to more reasonable levels?

What do you think a reasonable price is for Petrus? "Reasonable" has to take into account the kind of restaurant you are sitting in. Just curious.

excellent question! however, i am not in the wine or food business; therefore, it is difficult for me to answer specifically. but, i would pose the following:

there is too much evidence, a la frank prial of the ny times, robert parker, & many other professionals who have publicly stated THEY believe wine prices in restaurants have been & continue to be unjustifiably high!!

for myself, its simply knowing retail prices, & also knowing that restaurants pay LESS THAN retail, but they begin their pricing on retail, then arrive at some multiple. THAT multiple is what we are discussing, n'est-ce pas?

every business is "entitled" to a profit. what that margin is - is determined by the marketplace. IF restaurants can charge excessively high margins AND we pay those margins, then it is the public's fault that we allow this to happen because we continue to pay & pay, & gripe & gripe, but continue to go & go!!???

re: YOUR question: Petrus's price is as ridiculous as a 1963 ferrari 250 GTO that sold for $10mm at auction, but is now worth much less - THE point? someone paid the price! the same as someone will buy the Petrus! MY point - consult P.T. Barnum's famous quote: "there's a sucker born every minute"!!

as for the kind of restaurant... yes, sitting in Daniel is different than sitting in a Les Halles; however, i'm just not sure that a $25 retail priced wine should cost $75 in Les Halles, & $125 in Daniel? i don't mind paying for all the things that differentiate restaurants, but adding the kitchen sink mentality is just too much. and by the way, for all of daniel's hard work, he doesn't appear to be suffering economically. i assume there is EXTRA margin in his pricing

[Mark Sommelier]

another question: does anyone believe restaurants would sell MORE wine by the glass or more bottles, IF they lowered the prices to more reasonable levels?

What do you think a reasonable price is for Petrus? "Reasonable" has to take into account the kind of restaurant you are sitting in. Just curious.

excellent question! however, i am not in the wine or food business; therefore, it is difficult for me to answer specifically. but, i would pose the following:

there is too much evidence, a la frank prial of the ny times, robert parker, & many other professionals who have publicly stated THEY believe wine prices in restaurants have been & continue to be unjustifiably high!!

for myself, its simply knowing retail prices, & also knowing that restaurants pay LESS THAN retail, but they begin their pricing on retail, then arrive at some multiple. THAT multiple is what we are discussing, n'est-ce pas?

every business is "entitled" to a profit. what that margin is - is determined by the marketplace. IF restaurants can charge excessively high margins AND we pay those margins, then it is the public's fault that we allow this to happen because we continue to pay & pay, & gripe & gripe, but continue to go & go!!???

re: YOUR question: Petrus's price is as ridiculous as a 1963 ferrari 250 GTO that sold for $10mm at auction, but is now worth much less - THE point? someone paid the price! the same as someone will buy the Petrus! MY point - consult P.T. Barnum's famous quote: "there's a sucker born every minute"!!

as for the kind of restaurant... yes, sitting in Daniel is different than sitting in a Les Halles; however, i'm just not sure that a $25 retail priced wine should cost $75 in Les Halles, & $125 in Daniel? i don't mind paying for all the things that differentiate restaurants, but adding the kitchen sink mentality is just too much. and by the way, for all of daniel's hard work, he doesn't appear to be suffering economically. i assume there is EXTRA margin in his pricing

Retail stores pay less at wholesale than restaurants, not the other way around. Also, I always like to point out that the restaurant is merely the last one in the chain of distribution to take a mark-up. When you buy a little $4.99 bottle of Vin de Pays in the store and along the way it has been marked up by the broker, importer, supplier, distributor and then the retailer, how much do you think the original bottle sold for from the vigneron? Pennies I would guess. Food for thought.

[chromedome]

another question: does anyone believe restaurants would sell MORE wine by the glass or more bottles, IF they lowered the prices to more reasonable levels?

They taught us that in cooking school, twenty years ago. So does anybody do it? Nooo...

I guess the restaurant I work in is the exception that proves the rule. The chef/owner is very passionate about wine, and wants our customers to drink the best available product with their meals...so we have a flat mark-up policy on our wines (ie a straight "x"-dollar markup on every bottle, rather than a percentage) so that proportionally, the better wines are a better buy.

I'm in no position to tell you whether we sell more wine than our peers around town...or whether we make more profit from it...but we do enjoy some serious customer loyalty.

[jgould]

Retail stores pay less at wholesale than restaurants' date=' not the other way around. Also, I always like to point out that the restaurant is merely the last one in the chain of distribution to take a mark-up. When you buy a little $4.99 bottle of Vin de Pays in the store and along the way it has been marked up by the broker, importer, supplier, distributor and then the retailer, how much do you think the original bottle sold for from the vigneron? Pennies I would guess. Food for thought. [/quote']

a) its clearly an antiquated system with so many "fingers in the pie"!!

b) from vine - to - table: there is no other business i know that has the luxury of so many mark-ups along the way.

c) your point/arguement??? it does not justify the price!

d) if knowledgeable, i would be curious as to the difference between what a wine store retailer pays wholesale for a case/bottle - vs - what a restaurant pays?

e) obviously, a restaurant is the last to mark-up - duh!! however, where is it written the restaurant's mark-up can be so egregious??

f) a vin de pays: off vine $___? > broker-importer-supplier-distributor > $4.99 @ retailer > $____ glass @ restaurant bar???? i don't think i want to know

food-4-thought. i totally agree; which is exactly where this thread originated:

craig camp: "I'm sick and tired and I'm not going to take it anymore!!!

Sick of wine list rip-offs? ... "

[Mark Sommelier]

a) It is system set up to benefit giant liquor conglomerates at the expense of everyone else.

b) Probably true

c) If restaurants could buy directly from the source, they would compete with retailers for better prices. In most places, they can't.

d) Retailers are charged less by wholesalers because they will generally take larger case drops than restaurants. Remember, too, that each state has its own tax structure the penalizes the sale of alcohol/wine.

e) Restaurants are in a different business than wine shop/liquor stores. The object of the wine store is to sell the wine immediately. They employ a few guys to do this. A restaurant employs many people to sell not only wine, but to do all the other jobs necessary. A bistro may carry $10,000 of wine inventory. A restaurant like Daniel may carry an inventory of $500,000 plus another $100,000 in the accoutrements to serve the wine (glasses, table clothes, etc.).

Edited February 7, 2004 by Mark Sommelier (log)

[jgould]

I'm sick and tired and I'm not going to take it anymore!!!

Sick of wine list rip-offs? Warn your fellow eGulleteers in advance. However, don't just post a rant - give us some facts. Pick a wine on the list and compare it to the local retail price in the same town as the restaurant. It used to be considered an acceptable rule-of-thumb for wine list pricing to be double retail, but this standard seems to have been left far behind. Please remember that it is not fair to compare prices at your local wine bar where you play darts with a top restaurant that has to cover a sommelier, front and back waiters, captains and 2 dozen different types of Riedel - everything has a price and they have the right to charge more - just not 4 times more.

posts should look something like this

Fancy restaurant, Chicago IL - 2001 Santa Margherita Pinot Grigio - wine list price: $45.00 - Retail price: $14.99

simply repeating the theme of this thread, which is an excellent one. are we doomed forever to pay higher & higher mark-ups? it DOES appear we, the public, will!!! therefore, kudos to all those restaurants that can & do mark-up both mediocre wines, as well as the better wines far beyond what we should be paying.

Edited February 8, 2004 by jgould (log)

[jgould]

don't miss frank prial's "wine talk" column in today's NYT's!!!!!!! particularly the last column's info, as per this thread!!!!!!!!!!!!!

[Moopheus]

every business is "entitled" to a profit. what that margin is - is determined by the marketplace. IF restaurants can charge excessively high margins AND we pay those margins, then it is the public's fault that we allow this to happen because we continue to pay & pay, & gripe & gripe, but continue to go & go!!???

If you go to a restaurant and feel the wine prices are unfairly marked up, the obvious answer is to not buy the wine. If wine sales drop because the prices are too high, market forces will come into play. As long as you keep paying, the situation will not change.

[rshorens]

Another issue is the fact that having even a medium priced glass or bottle of wine requires extra tax and tip, which can make a moderately priced meal even more expensive. Given the general feeling that wine markups are steep, do you think that one is obliged to tip the usual 15-20% on the wine part of the bill? I do, so that I won't seem stingy, but it does make the experience less enjoyable, and I will eat out less often.

Edited February 11, 2004 by rshorens (log)

[hathor]

Regaring jgould's comment that no other industry has a mark up structure like wine... think again. Virtually anything you buy at retail has been thru a similar chain of production and distribution.

But I have a question, that may be off-topic. What about restaurants in the EU? Are the required to go thru distributors as well? I know that in Italy you can go to the winery and buy directly, but what about an Italian restaurant that wants French wine? How does the UK get their wine? Is it as heavily taxed (penalized) as it is in the U.S?

Thanks.

[russ parsons]

i'd like to hear mark s' thoughts on putting together a well-priced list. unlike many, apparently, i don't have any problem with restaurants overcharging for petrus or caymus. good as those wines are, in a restaurant context they are "sucker wines". the only people who are going to order them are those who are trying to show off or have more money than sense. to me, a really well-priced wine list is one that acknowledges the economic necessity of gouging those customers but uses some of the profits to underwrite the discounting of some lesser-known wines that they're really crazy about. charge $200 for the caymus cab if you want, but then have the sinskey carneros merlot for $40 or $50.

[jgould]

every business is "entitled" to a profit. what that margin is - is determined by the marketplace. IF restaurants can charge excessively high margins AND we pay those margins, then it is the public's fault that we allow this to happen because we continue to pay & pay, & gripe & gripe, but continue to go & go!!???

If you go to a restaurant and feel the wine prices are unfairly marked up, the obvious answer is to not buy the wine. If wine sales drop because the prices are too high, market forces will come into play. As long as you keep paying, the situation will not change.

its an amazing paradox, but a proven fact: market forces do NOT seem to come into play in this situation!!!!!!!!!

i have not seen where wine prices have dropped anywhere, & that's in the face of oversupply, which turns economics 101 upside down, i.e. when S > D, P decreases - NOT IN WINE'S CASE, unless as u state "as long as ... "

[jgould]

Regaring jgould's comment that no other industry has a mark up structure like wine... think again. Virtually anything you buy at retail has been thru a similar chain of production and distribution.

actually, that's true & not true. unless u have a better example - the # of hands that wine travels - from land - to - table is more than most!!! & if its not, the mark-ups long the way are certainly more than most.

[hathor]

Regarding jgould chain of mark up: I work in the 'fashion industry'. Mark up goes like this: small factory in China produces a sweater but they need to pay an 'exporter' for the rights to ship, I'm a middle man (design/prod company), and I get a mark up for design, overseeing prod, shipping, I sell to a 'manufacturer' (say Liz Claiborne), who in turn sells it to a retailer (Saks). So costing goes like this: $2.00 ex-fty, $3.00 ex-exporter, $6.00 ex-middleman, $15.00 ex-manufactuer = $45.00 at the retailer. That's pretty normal type of mark up structure. Depressing...but, hey you asked!

[jgould]

Regarding jgould chain of mark up: I work in the 'fashion industry'. Mark up goes like this: small factory in China produces a sweater but they need to pay an 'exporter' for the rights to ship, I'm a middle man (design/prod company), and I get a mark up for design, overseeing prod, shipping, I sell to a 'manufacturer' (say Liz Claiborne), who in turn sells it to a retailer (Saks). So costing goes like this: $2.00 ex-fty, $3.00 ex-exporter, $6.00 ex-middleman, $15.00 ex-manufactuer = $45.00 at the retailer. That's pretty normal type of mark up structure. Depressing...but, hey you asked!

THAT IS DEPRESSING BUT, still not as egregious as wine!! let's take a look:

grapes & growing $ 1.80

winemaking 2.20

packaging .92

marketing .60

sales & distri. 3.00

adminis. .60

winery profit 1.35 **

whlsale markup 4.56

retail markup 7.44

rest markup ~ 35.00

total P to customer $60.00 for a regular little CA cab from Napa

& that's NOT even considering a nice little bordeaux from the Medoc!!

[bobsdf]

Starfish in Toronto charges a flat (I thinks it's $25.00) per bottle markup. I wish more places did this.

[Brad Ballinger]

All right. Time to jump in.

Yes, there are markups with wine. As with beer. As with spirits. As with food. It's just the markups are more "visible" if you will to one who buys wine frequently. Where's the outrage for a bottle of beer that cost the same if not more than the wholesale price of the six-pack. And don't even get me started on the price of one shot (x24) of scotch in that bottle of single malt.

And wine will continue to be marked up at what the market will bear. In recent years, however, with some economic downturn and restaurants hungering for business, we have seen wine lists with wines in a greater price range, with plenty under $30 or even $20 dollars. These are still marked up, mind you. But these wines also are great food wines, not some souped-up CA Syrah that tries to overpower you and is impossible to match with food. Restaurants moving in this direction are making a smart choice. And there are half-price nights as well. I'm aware of some restaurants -- similar to Starfish -- where there is a standard dollar markup (instead of percentage) regardless of wholesale cost. And I've seen them as small as $10 over retail.

Restaurants are not the only culprits. We've seen the industry push the envelope with the market to see just how much can be charged. We've also seen a dollar declining against the euro. High prices are everywhere, not just in restaurant markups.

Yet, of course, there are restaurants that gouge patrons when it comes to wine. The answer is simple -- don't order wine from them. Or do it by the glass. Or pay a corkage fee and bring your own (where allowed and where legal). But, also, support and patronize the places that are doing it right.

[Moopheus]

i have not seen where wine prices have dropped anywhere, & that's in the face of oversupply, which turns economics 101 upside down, i.e. when S > D, P decreases - NOT IN WINE'S CASE, unless as u state "as long as ... "

But an oversupply in the general market doesn't really affect your decision whether to have wine in a restaurant, does it? All of that suppy isn't available in the restaurant. As long as there are enough customers willing to pay while in the restaurant, the restaurant can charge a high price. The customer chooses whether or not to have the wine; no one is forcing them to buy. If the customer pays they must have decided that at some level it's worth it to them, so they really shouldn't complain about the price in that case.

And yes, it is also true that many consumer goods, including wine, don't respond perfectly to commodity pricing; other factors come in to play. But super-premium prices can only mean someone, perhaps a lot of someones, is willing to pay.

[Mark Sommelier]

Customer: Your wine prices seem high.

Me: I could give you the wine for half the price if I could serve it to you in a plastic cup on a bare table.

Think about it.

[Brad Ballinger]

Customer: Your wine prices seem high.

Me: I could give you the wine for half the price if I could serve it to you in a plastic cup on a bare table.

Think about it.

Point made, Mark. Diners often forget that they are not just paying for food and something to drink with it. They are paying for the experience -- the setting including decoration, ambience, plateware, flatware, stemware; the kitchen staff time to source, prepare, cook, and present the food; the serving of the food from making recommendations, to timing the delivery of items to the table, and all the little details; the wine staff (in restaurants that have them) to purchase, inventory, select, match, and serve the wine; the overhead; the insurance; etc., etc., etc. This is why we deicde not to have dinner at home on occasion. If you just want the food, order takeout and pull the cork on your own bottle of wine.

But savvy diners know what constitutes value to them and when they are being fleeced. I think where people struggle with wine list pricing or other pricing is when they don't perceive any comparative value that warrants the markup. At Citronelle, I know I'm going to have a wonderful experience, and I expect to have to pay for it. But for other places who have the same markups but don't deliver on the service and the experience, then the markups become more of an issue. These are the places I'd like to see called on the carpet in this thread -- not the Citronelles of the world.

For example, there's an Italian restaurantin Minneapolis called Arezzo. It's in a tony neighborhood, and perhaps they are hoping to attract a certain clientele. The food is average -- uninspired pasta dishes, saltimboca (with cheese, which is just plain wrong), you get the idea. Some geek came up with the wine list. It's a smallish list, and 75% of the wines are over $50/bottle, 50% over $75, and 25% over 100. At least that was the case on my one and only visit over a year ago. The ambience is nothing special. The service even less so. The wines are nice enough wines, but they are in a different class than the cuisine. Shame on them.

[jgould]

its funny all these comments are so "inside-the-box"!!! in other words, everyone seems to be starting with the premise that everything is marked-up, ergo, deal with it -- whether from not going to these restaurants, or not ordering wine, or just consider it as payment for the experience.

that is not the point. most professional wine people will admit that wine for too many yrs was marketed to the hi-end & therefore price was secondary. now that wine is in the mainstream, the wine industry wants to keep the same pricing scale - NO KIDDING - DUH!! . obviously, if we, the public, allow them, which we have; then this ridiculous pricing will continue. therefore, craig's original point will fall on deaf ears - AS IT APPARENTLY HAS - EVEN HERE, except for a few of us.

& yes, i HAVE thought about it - serve good wines in thick, cheap tumblers on bare tabletops & let's see the results. the focus will be strictly on the quality of both wine & food & we will no longer have to hear ad nauseum about HAVING to pay for the "experience". its NOT a question of saavy diners or all the things a restaurant provides - DUH - WE ARE ALREADY PAYING FOR IT BY THE PRICING ALREADY IN PLACE!!! is someone suggesting its not enough??????

& no, oversupply does not, per se, affect decisions to HAVE wine, but it does enter into our disgust at unnecessary high prices when aware of BOTH the oversupply & the insulting mark-ups!!!

& to come full circle > that is my point exactly, when we still order & over pay, they will still charge!! that, my friend, is inelastic pricing!!

"the fault, dear brutus, is not in our stars, but in ourselves ... "

Edited February 12, 2004 by jgould (log)

[russ parsons]

mark, have you guys ever experimented with set menus matching wine and food, all-inclusive? say $250 a person. at that price you couldn't offer first growths (or even fifths), but you mght be able to give some exposure to the rest of the list and broaden some horizons.

[Brad Ballinger]

I think there's a little name calling of the kettle by the pot in terms of short-sightedness. Either that, or there is violent agreemYeent here. I can't tell anymore.

The point of Craig's post was to name names of placing whose wine pricing seems "painfully priced," and to include some support for the conclusion.

The topic has grown into wine pricing in restaurants, the discussion of which has kept this thread on page one of the forum list.

Yes, "just deal with it," is an acceptable position. Deal with it by paying it or going elsewhere. Not all restaurants target all types of customers. A restaurant could serve wine in a tumbler on a bare table. In fact, many do. But other retaurants have other business models. So what? If they can make a profit, good for them.

Regarding markups. They are part of being a retail customer. The retailer needs to make a profit to stay in business. The markups are (in theory) what the customer pays for the value added by the retailer. And restaurants are going to mark up wine as they mark up any product they serve to cover their costs in adding value to the customer -- DEAL WITH IT, or stay home. And some give the customers greater value than others. But it's the customer who ultimately decides, and right now restaurants with high-priced wine lists are creating enough value for enough customers.

It's all about what the market will bear on either a micro or macro level. It's a rule of business.

[jgould]

I think there's a little name calling of the kettle by the pot in terms of short-sightedness. Either that, or there is violent agreemYeent here. I can't tell anymore.

The point of Craig's post was to name names of placing whose wine pricing seems "painfully priced," and to include some support for the conclusion.

The topic has grown into wine pricing in restaurants, the discussion of which has kept this thread on page one of the forum list.

Yes, "just deal with it," is an acceptable position. Deal with it by paying it or going elsewhere. Not all restaurants target all types of customers. A restaurant could serve wine in a tumbler on a bare table. In fact, many do. But other retaurants have other business models. So what? If they can make a profit, good for them.

Regarding markups. They are part of being a retail customer. The retailer needs to make a profit to stay in business. The markups are (in theory) what the customer pays for the value added by the retailer. And restaurants are going to mark up wine as they mark up any product they serve to cover their costs in adding value to the customer -- DEAL WITH IT, or stay home. And some give the customers greater value than others. But it's the customer who ultimately decides, and right now restaurants with high-priced wine lists are creating enough value for enough customers.

It's all about what the market will bear on either a micro or macro level. It's a rule of business.

it never ceases to amaze me on this venue. when one chooses to disagree or point out the obvious, which goes against another's arguements, then its ok for that person to take a rather snide approach -- as opposed to intelligently deal with the issue at hand, which is "painfully priced wine lists", & BY DEFAULT, the high costs of wine in restaurants.

i personally don't appreciate the "terms of shortsightedness" comment, nor the "violent disagreement" statement by the poster. it infers too much self-righteousness & one-sidedness. i don't know if others feel the same, but there seems to be a group within egullet who feel their opinions carry more weight or feel they can say anything to either discredit an alternate view or name call, via concealed incendiary statements.

the point of the continuing "pg 1" thread is an honest discussion of the cause & effect of higher than necessary wine mark-ups in restaurants. due to the nature of this thread & the common topic of wine, not geography, it would be quite difficult to begin a list of the restaurants that mark-up without regard.

its not a question of "just dealing with it", or being told to take your toys & go elsewhere. its about having an open forum to discuss how, why, where & is there a solution. i don't believe its anyone's position here to dictate a restaurant's business model; however, this is a site, to meet & intelligently comment about the subject at hand, which in this case, is wine ... etc.

it is NOT helpful to state the obvious, ex. " mark-ups are part of being a retail customer... blah, blah, blah... " really, thanks for the incredible insight

& btw, here's one for the front page - markups are not theory.

"DEAL WITH IT, or stay home" its NOT a question of dealing with it, its an attempt to debate IF there is anything that can be done. who knows, MAYBE someone will come up with a novel idea.

lastly, its again obvious, that its the market that decides - thx again for the insight. however, as opposed to simply repeat old epitaphs, it might be more constructive to discuss what one thinks is a reasonable markup, etc, etc... or simply providing ONE's input - vs - attacking another's position.

what started out & continued, until recently, was a very thoughtful back-&-forth discussion about the merits of wine mark-up overkill. now, due to the level of comments recently expressed, it is no longer worthwhile to continue & as a result, another interesting, & topical debate bites the dust.

[Mark Sommelier]

mark, have you guys ever experimented with set menus matching wine and food, all-inclusive? say $250 a person. at that price you couldn't offer first growths (or even fifths), but you mght be able to give some exposure to the rest of the list and broaden some horizons.

Yes, Russ,

We offer wine degustations with both of the tasting menus. The Chef Table is already $250 per person with the wines included, which sometimes actually do include first growths and grand cru Burgundy. I also consult with customers on glasses to match their entrees, if they wish. You're right: its a good way to expose people to wine they might never try, and for me to move some of my more esoteric items.