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Corkage fee at retail shop/winebar

I'm interested in knowing the view of posters here about whether or not it is reasonable for a wine shop to charge a small corkage (say $5) for bottles bought in the shop and consumed at the shop's wine bar. Many local wine shops now have rather active 'wine bars' in them. They feature wine flights as well as a short wine list of tasting pours usually for much less cost than a similar quanitity of wine at any restaurant or traditional wine bar. Many also serve a menu of cheese pairings, small sandwiches and other appetizer items.

For the shop there is a greater profit percentage in the pours and the food than there is in the bottles at retail price. Pour prices I find are generally based on a 1.5 times multiple of the retail price of the volume of wine. A customer who buys a bottle to 'taste' pour-by-pour gets the same level of service and attention as someone doing a flight or pours or glasses but the shop is making only the profit on the bottle and doesn't get the multiple on it without a corkage charge.

In your experience AND in your opinion is a wine shop with a wine bar in it somehow different from a 'regular wine bar' or restaurant in regard to this subject? What issues do you see in this situation?

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  1. This is just one more ripoff that adds to a long list.
    The idea is: you try it, if people swallow it passively, then it's here to stay.
    Examples:
    Income Tax, "temporarily" created by the IRS in WWII
    "Handling Charges", fees out of thin air applied to pretty much anything nowadays
    the infinite list of ridiculous bank fees,
    the extra fee many merchants charge for paying with ATMs,
    the yearly fees applied by some credit cards
    and I could go on and on.

    My position:
    I do not patronize wine store/wine bar combos that charge corkage on their own stuff.
    If consumers complain, the custom will go away.
    If they don't ( as it's unfortunately the case most of the time, see list above ), then it'll be here to stay.

    7 Replies
    1. re: RicRios

      I don't necessarily disagree with you but I'm trying to focus on the WHY of this reaction. What is it about this business model that makes you feel they should offer pouring service, bread, crackers, glassware, etc.. at no charge if you buy a bottle from them. Do you feel they should also price their flights and pours, including the same services, at no profit above the retail value of the wine? Where I live most of them offer almost all the amenities of a wine bar or restaurant lounge these days, yet they seem to be perceived very differently.

      These businesses seem to be hung up in a unique space in people's minds. They need to offer wine tasting and winebar amenities to attract customers and to help sell wine, yet they are 'expected' to work on a non-restaurant (retail) price structure in that aspect of their business.

      1. re: Midlife

        Let me illustrate my point with a short story.

        In my first and last visit to Wolfgang Puck's Cut restaurant in Beverly Hills, I ordered a steak ( don't recall exactly which one ) and chimichurri sauce. The steak was top dollar, close to 3 digits. And they had the galls to add $2.00 to the bill for the chimichurri sauce. I met some time after this with Puck's top chef Lee Hefter, and complained him re. the $2.00. His response: "In order to provide extra service for free, we would have to jack up the prices for everybody, and that would be unfair." Now... come on! FIRST you are already charging top dollar, what the heck. SECOND what, are you telling me water and bread are part of my bill? Well, it happens I don't drink water and don't eat bread. Could you please deduct?

        Perhaps my point in all of this is: I feel very uncomfortable when every little item is billed. Now is chimichurri sauce, later it'll be use of napkins, visits to the restroom, pieces of bread consumed, extra fees for making a reservation,... should I go on? Back to the wine / bar business model: I don't expect free crackers, cheese or tapas. But neither do I expect being charged for pulling a corkscrew or using a stem. Hey, after all I always carry my own corkscrew & stem...

        1. re: RicRios

          So.... you have no problem sitting at the tasting bar and paying $3 for a 2oz pour from a $25 bottle ($36 for 12 total pours), but don't like paying $25 + $5 = $30 for the whole bottle? That's the simple math of it. The fact that the $5 is added on at the end is so offensive? Just trying to really understand this.

          BTW, a winebar or restaurant would likely charge $16 or so for 6 ounces of the same wine vs. $9 at the retail tasting bar. Is there another way you would suggest they get a fair profit on the bottle served on site? I know others share your opinion on this......that's why I've asked the question. I just really don't see how this new-ish wine tasting environment can make an honest profit on this part of their business if they're somehow caught in between business models and ae affected by this feeling on the part of consumers. Do they just have to suck it up on the bottle service or just not offer it?

      2. re: RicRios

        things in this world cost. there is no getting around it. ultimately everything has a price.

        there isn't a universal rule that should be applied to everything, because everybody's situation is different and everybody's goals are different.

        the fact to the matter is - you probably neither want to nor can't have the staff at BevMo, Costco or Trader Joes open that bottle you just bought for you to enjoy in their store, because they are not licensed to do so.

        if you'd like to take that bottle out to the Bevmo parking lot and enjoy it out there, you run the risk of being fined for public intoxication - unless you are in Las Vegas there just aren't that many places in the country for you to drink in public.

        and if you visit the little wine bar/store and the store owner has gone through the process of applying for the on-site alcohol license, the food and health permit, and buying those bar stools, dishwashers and stemware. he should have the right, if he chooses, to recapture his investment. the poster down below "sebi" chooses not to do so. that's very admirable of him and maybe he has other avenues help pay the rent. maybe his retail prices are higher than normal. who knows. all i know is that everybody deserves the opportunity to get paid.

        1. re: waffleman

          Waffleman: nope, normal retail markup.

          Like I mentioned, if you purchase a bottle from me, why should I care where it is drunk. And if I have the license to have open container, primarily for wine flights and education, then why not allow it at my wine bar?

          Here is a common situation: a customer who is a regular buys a wine flight, then wants a bottle of one of the wines, decides to buy a full bottle and would like to drink it at the bar.

          Should I?
          a) Look to get an additional $5-$10 corkage from that person?
          b) Open the bottle for them, let them enjoy it and they leave with a good feeling

          To me that good will translates into word of mouth advertising. There is a cost for that.

          It just seems a bit short-sided to me to ask for corkage. Most retailers will tell you it is the "repeat" customers that make your business thrive. If you are in it for the long haul, providing the best customer service is the way to go.

          1. re: sebi

            sebi: i'm not hating on you. i said it's admirable that you do it that way. that's great for you and great for your customers.

            my contention that it is perfectly reasonable for some shop owners to charge a corkage. just as i think it's reasonable for restaurants to charge corkage.

            i wish every wine bar didn't charge corkage and wish every restaurant didn't, but it's a pretty standard and common practice and shouldn't be viewed as unreasonable.

            and further, most bars that i go to waive it for regulars.

            in fact, the place that i go to most, i talk to the owner quite a bit. he says he only really charges it half of the time. the biggest determinant on whether he charges the corkage is the customers attitude.

            1. re: waffleman

              I hear you. And I agree that it is reasonable from a business perspective. But I also know that some people do look down upon it. And I always want to keep in mind what it was like to be a customer...

      3. Yep, sometimes you do not make the same profit on everything you sell. The Wine bars that charge a corkage on their own product and pissoff good customers are simply stupid. They are making money on the wine they sell, the folks that are smart enough to buy a bottle are probably serious knowledgable winos, just the kind of repeat customers these places need to stay in business. Don't piss off the money train, you are much better off having happy repeat customers so you can keep making money off them with every visit.

        2 Replies
        1. re: duck833

          Once again..... could someone help me with why a corkage is different from the shop taking a markup on individual pours from bottles of the same wine?
          I KNOW the corkage pisses off some people...... but the same people don't mind paying that service markup on individual pours. That's what I don't get.

          1. re: Midlife

            Retail sale: ring up bottle, place in bag (or box), thank customer, done.

            Sales by-the-glass: take customer's order, open bottle, pour glass, serve customer, thank customer . . . clean up after customer leaves, wash wine glass(es), dry glass(es), put away glass(es), wipe down bar, fill open bottles with inert gas to preserve them overnight . . . .

            When a customer brings his own wine into a restaurant, OR buys a bottle in a store and drinks it there (in the store's license wine bar), you are still using their glasses, their bar/table. their chairs, etc.

            So . . . you tell me: which of the two scenarios above does your "corkage" more closely represent? Did you bring in your own corkscrew and glasses, or did you use the store's wine glasses?

            From what I've read so far, it not only seems perfectly reasonable to charge a corkage in this instance, but economically necessary and even desirable!

            Cheers,
            Jason

        2. I believe that a wine bar in a wine shop is very different from a restaurant or bar that charges a corkage fee. A corkage fee is charged when a customer brings in a bottle of his own and does not purchase one from the establishment. Imagine going to a restaurant, ordering a bottle of wine, and then being charged, on top of the bottle just purchased, a corkage fee. I can appreciate the wine seller charging for tastings or actually selling legitimate glasses of wine, but they should not profit further on a bottle they sold moments ago. Instead, they should be bending over backwards to accommodate customers who not only purchase from their store, but who help to create an environment where the store is not only a point of transaction, but a community establishment where the product can be enjoyed and highlighted for other customers.

          My .02.

          James

          1 Reply
          1. re: AManHastoEat

            The mark up on a bottle of wine sold in a store would cover the store costs - rent, staff, etc. If a store then decides to have a bar, that is going to entail extra costs, such as someone to pour, glasses, a dishwasher, washrooms maybe, etc. Why should those things come for free?

            What it all comes down to is ome people just hate paying for anything...

          2. I can't speak for everywhere, but in many places, including here in DC, there is a substantial extra cost to get a license that permits you to pour wine by the glass as opposed to selling it by the bottle. I don't see anything wrong with a wine shop charging a modest corkage fee to allow you to drink your bottle there, using their glasses, etc.

            1 Reply
            1. re: dinwiddie

              Yup, the additional (required) license can cost anything from $$-$$$$

            2. I don't understand the whole concept.

              If you are going to buy a bottle of wine from the "off-premises" portion of the the store, why do you want to drink it "on-premises"?

              If you want to drink on premises, sit at the in-store wine bar and drink a glass of wine.

              Charging such a fee seems perfectly reasonable to me. The action of buying a bottle from the retail 'off=premises' license, and then carrying it to the 'on-premises' licensed portion of the ship seems to me rather ludicrous.

              2 Replies
              1. re: FrankJBN

                There are some retail wine stores that -- where permitted by law -- have a second, "on-sale" license. They serve limited amounts of food, but they DO serve food, and often times people DO congregate there to taste through a flight that is offered AND/OR buy a bottle to serve and drink with friends.

                Two such examples in Northern California are the Ferry Plaza Wine Merchant -- http://www.fpwm.com/ or http://www.fpwm.com/wine_bar/index.html for info on their wine bar and its $6 corkage -- and Solano Cellars -- http://www.solanocellars.com/ or http://www.solanocellars.com/catalog/... for info specifically on its wine bar.

                Cheers,
                Jason

                1. re: zin1953

                  "There are some retail wine stores that -- where permitted by law -- have a second, "on-sale" license. They serve limited amounts of food, but they DO serve food, and often times people DO congregate there to taste through a flight that is offered AND/OR buy a bottle to serve and drink with friends."

                  You seem to have misread my post.

                  When I said "If you want to drink on premises, sit at the in-store wine bar and drink a glass of wine", that included the possibility that one might purchase more than one glass.

                  The situation you describe is opposite of what the OP describes.

              2. Based on the example listed, $5 corkage is a bargain compared to any wine bar or restaurant.

                Retail markup is much lower than a restaurant markup (approximately 1 1/2 versus 3-4 even 5 times bottle cost at a restaurant) Most restaurants will argue that the extreme mark up is needed to cover their cost in glassware and service. If an on premise wine bar offers all that at only an added $5 cost, that's an awesome deal.

                Do those who object to the $5 corkage feel as strongly about restaurant markups? Not to mention that to bring the bottle to a restaurant they would also pay corkage (often $15-20) for the same service?

                1 Reply
                1. re: pierrot

                  Winebars still up the retail price of their wines you buy from them. They are almost ALWAYS on the high end of wine-searcher costs. Now if they were good buys then the $5 doesn't mean much. But they really aren't much of a deal, so you're already overpaying to begin with...

                  http://clayfood.blogspot.com

                2. This is clearly a subject where opinions fall on either side.

                  I would still like to know if those who think a corkage fee is inappropriate truly understand the profit structure of a wine retailer versus the extra overhead of the on-premise side of the business. If they do, why do they feel the shop should not get a service profit in exchange for providing a winebar-type experience?

                  I think, and I could be very wrong, that there is a wide variance of what these shops actually look like and provide in the way of on-premise service. One specific shop I'm familiar with has about 1200 feet of floor space, of which maybe 600 feet is composed of an 8 chair bar and 3 3-top bar tables. I DO understand the side of this that says that cultivating the true wine enthusiast's business is well-served by letting people drink bottles on-premise, but I tend to think the staff could comp "serious" buyers' corkage the way they might comp pours for good/serious customers from time to time. That may be a difficult call sometimes, but I just can't seem to get my mind around the idea that all the establishment is entitled to on bottles from the shelf is regular retail markup while people are OK with higher prices (=higher markup) on flights and pours. Is it simply that the corkage is seen as somehow a penalty because it's added on after the fact?

                  16 Replies
                  1. re: Midlife

                    >>> . . . but I just can't seem to get my mind around the idea that all the establishment is entitled to on bottles from the shelf is regular retail markup while people are OK with higher prices (=higher markup) on flights and pours. <<<

                    That's OK, I just can't seem to get MY mind around you're not getting it. ;^)

                    1. re: zin1953

                      A bit confused now. All 3 of your posts above would seem to support that a shop of the type described is entitled to a corkage. I DO understand that people who find it wrong have their reasons, but can't fathom why they see corkage as different from a profit on flights, pours, etc.. Seems like they just don't want to?

                      I think this horse may be dead now.

                      1. re: Midlife

                        Hi Midlife, I own and operate the very kind of shop that you speak of, with both on and off-site licensing.

                        I do not charge a corkage for opening an entire bottle that is purchased. Now that may be a bad "business model" but the way I look at it is, I have sold you the bottle, it doesn't matter to me where you drink it.

                        I know that I will have to wash that glass and that I have to provide seating at my bar (let alone the insane costs of permitting to start) but I prefer to make up those costs other ways.

                        I consider it the cost of doing business. Most of those full bottle folks are regulars and smart people who realize that if they purchase a bottle rather than do flights they get more wine for the money. Those people get rewarded in my book.

                          1. re: sebi

                            sebi,

                            Thanks for that response.I think I'm now in the process of being converted on this issue. I suppose that the shop has to look at the situation as something to encourage more business rather than as an additional profit center. If they sell a $35 to $50 bottle that way they are certainly taking in as much gross revenue as with two or three tasting flights. If the dollars they miss in profit convert to additional customer good will, loyalty and sales it's worth it to them.

                            But let me ask this........... are your flights and pours charged at a markup over the proportionate bottle retail? I think my obviously overly anal thought process needs to complete the logic with that piece of info.

                            1. re: Midlife

                              Believe it or not my flight pours are not really calculated that carefully. I always give more than 3 oz pours per wine and offer "re-visits." It is far more important to me that someone gets the feel of the wine than to be stingy with my pours.

                              I generally pour more obscure stuff so this goes a long way to ingratiate the store and my picks to customers. I see my wine bar as an extension of the store not as a bonafide money maker. Though I do make money with it my primary focus is providing a platform to taste the store's wines (in a wine bar setting).

                              Of course this type of format may change as business needs are dynamic, but for now, it works.

                              1. re: sebi

                                I appreciate the response and I fully understand your thought process. You say you make money on the wine bar, but aren't specific relative to my question of how much compared with bottle sales.

                                The shop in question is limited by the state ABC to 2 ounce pours (this seems to be true of most shops in this area) but is pretty liberal with that measurement as well as with free pours of new things and wines that seem to have been left by sales people for the shop to try. Their overall philosophy seems to be pretty much the same as yours with the only exception being the difference re a corkage charge. In discussing this in our area it seems like current business conditions have made these shops much more dependent on tasting revenue/profit, thus making this a bigger issue that it might otherwise have become.

                                1. re: Midlife

                                  I am not specific about the wine bar margin as compared to the bottle sales because it is all variable. So are bottles sales as a matter of fact. For the most part normal wine shops work off a 1.5 type markup or 30-33% GPM, but what about when you buy closeouts or get the best discount for 5 and 10 case buys. Then those margins are different.

                                  It is even more up and down with my wine bar. One night I may pour three wines totaling $30 wholesale but get twenty tasters at $10 each. So that is $200 on a $30 investment.

                                  But another night I may choose slightly higher end wines, totaling $60 wholesale and only get 10 tasters. In this case $100 on a $50 investment.

                                  And these are only 3-wine flight examples. So it is always different. Not to mention there are often times when I need to open multiple bottles. But do those extra bottles justify the added cost if I only get 5 additional tasters?... you see where I'm going with this.

                                  In the end I find it better to just pour and let people enjoy rather than count pennies and wine drops.

                                  By the way, can I ask which state this store is in that has to abide by this 2 oz pour policy by ABC? And do they actually send reps out to police this?

                                  1. re: sebi

                                    Thanks again for sharing the inside info. The shops I speak of are in Southern California. The ABC somewhat selectively (in concert with local city authorities) has begun placing the 2 ounce condition on off/on-premise combo shops. This is not state law, but is applied locally. The reasoning seems to be sure these shops don't become bars but have an educational reason for offering on-premise consumption. They can offer as many pours as people want ("for education and comparison") but each can only be 2 ounces. There are field reps but they are mostly decoys to expose underage sales and consumption. I've never heard of a shop being violated based on pour size but they all seem to take the restriction seriously.

                                    1. re: Midlife

                                      It sounds like you work for ABC? You have too much information about this "pour situation" in SoCal (just messin' with you).

                                      Incidentally every new license or over-saturated area for licenses goes through this kind of City scrutiny about whether or not it is just a full blown bar or educational. Their famous line is that it impacts police and can create a public nuisance. Nothing new there...

                                      1. re: sebi

                                        Not for ABC. We have one of these shops in the family, so I know the details.

                                2. re: sebi

                                  I have observed my own behavior visiting wineries...when tasting is free, I always buy some wine, when you have to pay for flights I might or might not. Free tastes are a tried and true way to drive sales, I am sure the costs involved are recouped by increased business.

                                  Similarly, free wine bar service makes a customer feel appreciated because they are getting something for free, and will likely buy more and return.

                                  1. re: kenito799

                                    I presume, by "free wine bar service" you mean lack of corkage. It is illegal to give drinks away.

                                    1. re: zin1953

                                      yes i meant the service...but it is legal to give drinks away. When one of my favorite bistros in NYC changed ownership and was between liquor licenses, they offered free bottles of wine with meals, because they weren't allowed to sell them. Wineries and wine stores can give free tastes away.

                                      1. re: kenito799

                                        In California on-sale licensees are allowed to give away a limited amount per person, per day. Actually it's a maximum of 3 one ounce pours.

                                        "An on-sale retail licensee licensed to sell wine or distilled spirits may offer instruction on the product by furnishing not more than three tastings to any individual in one day. A single tasting of distilled spirits may not exceed one-quarter of an ounce, while a single tasting of wine may not exceed one ounce." (Section 23386 and Rule 52)

                                        Wineries fall under different rules.

                                        1. re: Midlife

                                          It all depends on the jurisdiction.

                      2. To add more fuel to this discussion I submit the following. If I bought a $50 bottle of wine at a shop and then had it opened at their wine bar, was furnished glasses etc I would take care of the bartender/server. I would for sure leave at least a $10 tip.