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What is a reasonable mark-up on wine?

LastWyf Jul 16, 2008 07:20 PM

After almost 6 years in Houston, we finally made it to DaMarco's for dinner last Saturday. The food and service were both excellent, and I felt that for the quality and quantity, that the food was reasonably priced. With dinner we also had a lovely bottle of 2004 Vietti Barolo Castiglione for $125. When we got home, I was curious to find out more about this wine and online learned that it retails for about $40. I expect to pay 100% mark-up wine, but I really think that 200+% is excessive. Any opinions on this?

 
  1. Bill Hunt Oct 8, 2009 06:53 PM

    OK, at the risk of repeating myself (think that I have but with 78 posts, I cannot be sure), there was a study done by the wine trade and the restaurant trade a little more than a decade ago. In that study, profitability went up, when wine prices came down. The restauranteurs were making it up on the volume.

    Fast foward to today, over a decade later. I think we'll see much more of this same sort of thinking. I would anticipate that smart restauranteurs will get it, and start shifting their wine prices to satisfy a different economic strata. The days of banking execs. flying up to Yountville from LA for lunch with US$5000 btls. of wine seem to be gone.

    Heck, I was able to get a reservtion at Petrus in Mayfair, London, where they would not speak to me 5 years ago, because I was not an officer with Barclays! Sunday will start to tell how the UK wine prices have fared with the economy.

    Hunt

    2 Replies
    1. re: Bill Hunt
      steve h. Oct 8, 2009 09:04 PM

      nothing like a recession to restore a little order and dignity to food and wine prices. san francisco is a favorite city of mine and i'll be there next week. barcelona is brand new to me and i'll be there late november/early december. i'll pay attention to wine markups and tipping proclivities.

      1. re: steve h.
        b
        bulavinaka Oct 9, 2009 09:29 PM

        I think a lot of pricing not only depends on the macro-economic environment, but also micro-environments (i.e., individual establishments' circumstances). I'm in LA, and I live and work close by a few restaurants that have been very popular. These restaurants have been charging $10-15 per glass of pretty good (not great) wine. As the saying goes, "what ever the market will bear."

    2. d
      duck833 Oct 8, 2009 06:37 PM

      Had a great bottle of 06 Caymus Cab recently at the "Keg" in Desert Ridge in Phoenix. Just a little NE of Hunt. I noticed the price was $96, thought that sounded like a bargain and ordered it. The server brought one and warned me that it was the last one in stock. Others have figured it out also! On cellartracker I noticed that average cost was about $65. So the restaurant was only marking it up 50%, totally a fair and decent markup.

      I will be going back there, I appreciate wine friendly places.

      1 Reply
      1. re: duck833
        Bill Hunt Oct 8, 2009 06:46 PM

        I too think that this was fair. I think that it was in this thread, up a bit, that I commented on the Ch. St. Jean Cinq Cepages '96 for US$55. That was Durant's. I believe that I and my parties drank a case. They started at that price and held it, even after the WS named it Wine of the Year. My hat was off to them, especially as I only had two bottles in my cellar!

        Now, I do have to admit that the Cinq Cepages is a lovely wine, but I've found that it's better upon release, through about 4-5 years. It seems to fade very quickly after that, by my tastes. Still, it's a very nice wine. Hey, a wine can be wonderful, whether it ages well, or not.

        Thanks for mentioning the Keg. Have only heard of it, and have not been yet. Is the food worth the drive from North PHX? [Maybe I should ask that on the SW Board?]

        Appreciated,

        Hunt

      2. a
        a81 Oct 6, 2009 06:24 PM

        I know this is an old thread but I was in Philly last week at one of the 'hot' restaurants and saw Tenuta San Guido Guidalberto '05 for $185. I bought that same wine wholesale for $30 per bottle in NY!! How about a 600% markup for you ! I looked up the price for that bottle in PA as people told me that their wine laws were different than NY's and the price was $44. I won't be visiting there again that's for sure.

        3 Replies
        1. re: a81
          Bill Hunt Oct 7, 2009 09:49 PM

          Some restaurants will charge what they think they can get.

          Going back some years, I was buying the '96 Ch. St. Jean Cinque Cepages for US$55. I drank the last bottle at a high-end PHX, USA steakhouse at that price, even well after it was delared the Wine Of The Year by WS. At the same time, a high-end steakhouse in DEN went from US$100 to US$650. When the sommelier was asked, his answer was "we can get this, and more." This was a wine released at about US$ 30 retail.

          In my estimation - it depends...

          Hunt

          1. re: Bill Hunt
            TonyO Oct 8, 2009 06:53 AM

            I say shame on the consumer that supports these practices. I always try to access the wine list on line before visiting a place I am umfamiliar with. This allows me to check their pricing structure, have a couple alternatives if my first choices are unavailable, and think about pairings (and if allowed by law, pay their corkage fee and bring a bottle or 2 from home). Pay what you think is fair as "a good deal is a state of mind"...........................

            1. re: TonyO
              Bill Hunt Oct 8, 2009 06:27 PM

              TonyO,

              I agree. When picking restaurants, I try to look at their wine lists too. Pricing does come into play, but I usually just go from memory and seldom actually research the prices. I'm looking more for the selections, and thinking of pairings with the menu fare. Still, if I see some glaring "gouges," I know to hold onto my wallet, when I walk in.

              I have seldom taken advantage of BYOW, and do not travel with wines from the cellar. I just hold my breath and go with it, if I wish to dine there. There have been a few exceptions, but almost all were at restaurants, where I was known, and the wines were very special. I always cleared this with the management and have never been denied, regardless of what the local laws were.

              Only time that I can recall asking about BYOW was on Maui, where I ended up with some red and white Burgs, that were purchased on the Island, to share with good friends. Schedules changed, and they were rained on so hard on O`ahu, that they almost could not make it to Maui. Well, I was informed that the County of Maui (unlike all other Hawaiian Islands) had a strict NO-BYOW policy, regardless of the level of these wines, the offer to share with the sommelier, the server and the chef. OK, I just picked up 9 other bottles at Mr. Wine and had the full case, with my 3 Burgs (bought at Mr. Wine earlier in the week) back to PHX. No biggie, but it was the first time that I was ever denied, though I've only asked to do this about four times in my life.

              Even locally, and with an overflowing cellar, I only think about doing this for very special wines and very special occasions, AND at restaurants, where I'm well-known.

              Just some personal observations,

              Hunt

        2. d
          dgris Oct 1, 2009 12:45 PM

          Having traveled to Spain, Italy and France, i got a little spoiled with their reaonable wine prices. On our last trip to Barcelona, I would ask if it was the glass price & was told, no the bottle price, We could & did have a very good dinner and bottle of wine apiece for E30/each including tip, it is expected & we were not driving. Dinners last at least 2 hours or longer with no waiter hovering over you pouring your wineand pushing you out the door for another seating. Subject for another thread. Ther seem to be a movement for resteurants, the more resonable price range to lower their mark up. We have had some dinners wherethe bottes were in the $20+ range.

          1. TonyO Jul 21, 2008 12:08 PM

            Some interesting points that raise a few questions;

            1. Are purchases based on "best deal" or best match for the meal ?? The two often have different answers. For example, I see a wine that I like and it is $12 retail and the restaurant has it for $36. Do I avoid it ? Well, it depends on how I view the value of the wine at both $12 AND $36. If it drinks like a $20-$25 retail wine, I may buy it at the restaurant. If it drinks like $15 wines at retail I will avoid it unless it matches a particular menu item that I am planning on ordering. Is the restaurant "ripping me off" at $36 ? No. While the markup may be a bit high, it is not the only wine on the list.

            2. I am much more concerned about the quality of the wine offered, the glassware used, and the temperature that the wine is served at than trying to calculate the profit a restaurant is making. In Vermont, I see markup ranging from a low of 25% over retail (very unusual to 3-4X with about 1-1.5 x being the norm. I view wine as part of the larger experience and always have the option of ordering by the glass. I will say this,if a restaurant consistently marked up their wines by 3x or more over retail, it would take some great cuisine to make me a regular and I may pass on wine as a result.

            My goal is to find a wine that compliments the cuisine, is fairly priced, and properly served. That's it.

            2 Replies
            1. re: TonyO
              z
              zin1953 Jul 21, 2008 01:50 PM

              >>> My goal is to find a wine that compliments the cuisine, is fairly priced, and properly served. That's it. <<<

              Bravo! What more could anyone ask for?

              1. re: zin1953
                Bill Hunt Jul 21, 2008 07:10 PM

                Man, I second that. It is about the quality of the experience. If it's a bottle of wine priced at US$500, or one at US$25, it is about the total experience.

                To get back to the OP's questions/statements, I am "used to" markups of about 200% wholesale being the norm. I have opted for the 300% wines, when the meal and the situation dictated and not fretted over it. It was a decision that I made. Same for my wines with meals in the UK. I do not try and calculate the exchange rate, or attempt to guess if they get a better deal on that Bdx., than a similar restaurant in the US. If it compliments my meal, I plunge in and let AMEX sort it out next month.

                In my experiences, the most expensive bottle of wine that I've had was not worth the $, but then the least expensive bottle, that I've had, was not either.

                Hunt

            2. c
              CulinaryKate Jul 20, 2008 08:51 PM

              I think the real question (and I'm sure this is covered by others, but I'm not really interested) is tipping on excessively marked up wine that was selected by you without the help of your server. I believe Wine Spectator covers this in their most recent issue, but i'm not male, and i'm not over 50 and I don't usually go out to dinner at places that have "impressive" wine lists on a month basis (unlike the wine spectator readers that responded to a questionnaire about wine service in restaurants) so I decided not to read the article.

              2 Replies
              1. re: CulinaryKate
                z
                zin1953 Jul 21, 2008 07:22 AM

                HUH ?!?!?!

                Let me see if I understand: you aren't interested; you didn't read the article; but you believe a magazine discussed a particular subject in depth . . .

                OK. Works for me . . .

                1. re: CulinaryKate
                  invinotheresverde Mar 2, 2009 11:27 AM

                  Late to the game, but wow, what a misconception! The number of young people enjoying wine, and even working in the industry, is higher than ever. Wine is no longer associated with rich, old coots. What a boatload of bum information!

                  ~A 31 Year Old Female in the Biz

                2. j
                  jpc8015 Jul 17, 2008 10:05 PM

                  I have worked in many restaurants and put together my fair share of wine lists. As a rule of thumb I would mark up the house wines by AT LEAST 400%, that way I am paying for the bottle as soon as I open it to pour a single glass. As the wine gets more expensive I would bring the mark up down but iw would never come below 150%. Most big restaurants out there are budgeted for a 28% pour cost, that means that you will be paying roughly four times as much for the wine as they paid for it. Thats why it's tough to go into any restaurant these days and order a single glass of anything other than the house wine for les than $7.50.

                  I reccomend cooking at home. If you have a grill and know how to use, and a good sautee pan you can do most things at home that are done in a restaurant. Then if you are able to go to a good wine shop you can explin to the people working there what you are preparing for dinner and they are normally more than happy to help you find a wine that will go perfectly with your meal. If you spend $60 on a bottle of wine in a good wine shop you will get a bottle of wine that will cost you as much as $200 in a restaurant.

                  There is nothing more romantic, intimate and satisfying than preparing a meal for your loved one.

                  5 Replies
                  1. re: jpc8015
                    z
                    zin1953 Jul 18, 2008 06:36 AM

                    >>> I have worked in many restaurants and put together my fair share of wine lists. As a rule of thumb I would mark up the house wines by AT LEAST 400%, that way I am paying for the bottle as soon as I open it to pour a single glass. <<<

                    I completely agree, but let's step back and get into the REAL world of house wines for a moment . . .

                    True story.

                    Back in the late 1970s and early 1980s, when I first went into wholesale wine sales, it was still truly the days of "house wines," when restaurants offered glasses and/or carafes of a "house white" or house red" -- poured either from 4.0L glass jugs or, increasingly, 18.0L "casks" (really large bag-in-a-box setups). Budweiser -- under their "Master Cellars" label -- even had 50.0L "kegs" you could dispense through something that looked suspiciously like a beer tap in a bar . . .

                    One (among many) of my accounts was pouring Summit California Chablis from 18.0L casks as their house wine. I was working for a small importer, and I said to the owner that I wanted to talk about his house wine. (Up until that point, I had sold him a little high-end wine, but this was the "___________ Bar & Grill" -- not necessarily known for its fine wines.) He told me there was no point, that he had gotten his house wine costs down to less than 3¢ an ounce (!) and there was no way I was going to beat that!

                    Now let's look: say it was 3¢ exactly, and say he poured a 6-ounce glass (I think it was actually four, but . . . ). So his glass cost was 18¢, and he sold the glass for $3.00. That is a 94% beginning gross profit, or A MARKUP OF 1,667% !!!

                    I told him that, no, I couldn't compete with that, but -- I asked him to look at the actual dollars and cents of the matter. I told him I had an Italian Chardonnay from the Alto-Adige that I could bring in to his place at 10¢ an ounce. ($36/case less a 15% discount if he bought 10 cases at a time.) He could sell a six-ounce glass for $3.00 and still make $2.40 profit per glass (or 80% BGP) on a markup of 500%. And, by the way, what would pouring an imported Chardonnay say about his house wine, and his restaurant, that wasn't being said by his choice of Summit Chablis in a box???

                    He switched right then and there.

                    Cheers,
                    Jason

                    1. re: zin1953
                      j
                      jpc8015 Jul 18, 2008 08:50 AM

                      House wine is a joke. If you go to most restaurants and order a glass or "red" you will most likely pay $6.00 for something that cost no more than $1.25 in the glass. Thats okay if you are not a person who really enjoys a good wine. Rarely do I ever order wine in a restaurant anymore. For that matter, I rarely eat in restaurants anymore. I prefer to cook great meals at home for a fraction of the price and most often a higher quality list of ingredients. This goes for the wine too, I'll spend forty dollars on a botle of wine, fifty dollars on ingredients, plus a few pantry ingredients, and I've got a meal that would out do most restaurants I've been in. Obviously there are exceptions, if I am on vacation in Las Vegas I am not going to try and cook a meal in my hotel room. But I really encourage everybody to cook at home. It truly is a lost art form.

                      1. re: jpc8015
                        z
                        zin1953 Jul 18, 2008 10:02 AM

                        >>> House wine is a joke. <<<

                        Yes, well, you brought it up.

                        >>> As a rule of thumb I would mark up the house wines by AT LEAST 400% <<<

                        I order wine in restaurants all the time (as well as bringing in my own bottles). I dine out all the time -- and not just when I'm on vacation. And I rarely feel as though I am being ripped off by the wines I buy off a restaurant's wine list, even though I see a great many of outrageously prices wines on said same list. I've spent $50 for a bottle and thought I got a great bargain; I've spent $150 and thought I got a great bargain. I've also seen bottles that were $50 and $150 that I thought were complete rip-offs! The trick is to select carefully.

                        That said, I would define my wife as an excellent cook (my talents reside more in the areas of sous chef-and-sommelier ), and -- being fortunate to live in Berkeley, CA -- we frequently source our ingredients from the same places/farms/butchers as many of the great restaurants in our area.

                        I agree that we have prepared a great many meals in our home, and had meals in the homes of others, that (IMHO) rival what we can get in restaurants. When we go out, it is usually to restaurants that either do better than we do in the kitchen, or prepare a style of cuisine we do not.

                        Cheers,
                        Jason

                        P.S. I, too, rarely order the "house wine" in US restaurants (as separate from bottles of the list or wines offered by-the-glass. However, when in rural France, it's often difficult to beat "un pichet de vin rouge."

                        1. re: zin1953
                          Bhutani Jul 19, 2008 12:15 PM

                          When you look at a restaurant wine list, Jason, it is different than probably 99.99% of the general public looking at a wine list. I consider myself fairly well versed but I can't always readily identify the bargains to be found on the list. I know that I for one have had experiences like the original poster where I have thought that maybe I found a decent value (where I know the wine type, the vintage but not necessarily the producer) only to find out later that I paid far more than retail than I thought.

                          I understand that it is the job of a good sommelier to help guide you to the good buys. I have found that sort of guidance to be the exception rather than the norm, though, when I solicit help in selecting wine at a restaurant.

                          Another reason that I think consumers aren't as outraged by the price of cocktails, beer, water, etc is that there is full disclosure. By that I mean, the customer has some sense what those items cost retail beforehand so they don't feel ripped off after the fact. In the case of wine, however, most consumers are at a disadvantage as often they have no idea beforehand what the retail is on the majority of wines on the list. That is why I like restaurants who post and regularly update their wine lists on-line.

                          1. re: Bhutani
                            z
                            zin1953 Jul 19, 2008 05:47 PM

                            Some give-and-take . . .

                            >>> When you look at a restaurant wine list, Jason, it is different than probably 99.99% of the general public looking at a wine list. I consider myself fairly well versed but I can't always readily identify the bargains to be found on the list. I know that I for one have had experiences like the original poster where I have thought that maybe I found a decent value (where I know the wine type, the vintage but not necessarily the producer) only to find out later that I paid far more than retail than I thought.<<<

                            While it is true that I spent 35+ years in the wine trade, I have little idea as to what the current retail prices are for wines like the classified châteaux of Bordeaux, Grands Crus of Burgundy, high-end California Cabernets, California Chardonnays -- for dozens of different categories of wine. Why Because quite simply they became so expensive YEARS AGO, I found them obscene and stopped paying attention to them completely. (Rarely do I spend more than, say $40-50 at retail, and the vast majority of my wine purchases today are in the $15-25 range). I certainly don't buy those sorts of wines in restaurants . . .

                            So I couldn't begin to tell you if the price on Cache Phloe Cellars Napa Valley Cabernet is a bargain or a rip-off.

                            >>> I understand that it is the job of a good sommelier to help guide you to the good buys. I have found that sort of guidance to be the exception rather than the norm, though, when I solicit help in selecting wine at a restaurant. <<<

                            No. The job of a good sommelier is to assist you in selecting a wine that will compliment your meal and be within your price range. It is NOT to guide you to the "good buys."

                            However, the definition of a great wine list has nothing to do with size, and everything to do with selection. First and foremost, the wines must compliment the restaurant's cuisine. Secondly, the more depth there is on a list, the more the wine buyer (sometimes it's the sommelier; sometimes not) has room to "play." That is, they can find wines that may or may not be obscure to the average wine drinker, but that DO provide an excellent value to the restaurant's patrons. This may be an exceptional Côtes-du-Rhône, a wine from Sicily, the Alentejao, New Zealand, Washington State or California -- but it's doubtful that it's going to a Robert Mondavi, a Kendall-Jackson, a Clos du Bois, or a Chateau Ste. Michelle.

                            >>> Another reason that I think consumers aren't as outraged by the price of cocktails, beer, water, etc is that there is full disclosure. By that I mean, the customer has some sense what those items cost retail beforehand so they don't feel ripped off after the fact. In the case of wine, however, most consumers are at a disadvantage as often they have no idea beforehand what the retail is on the majority of wines on the list. <<<

                            How much DOES a martini cost in a retail store?

                            Anyone who drinks (e.g.) Robert Mondavi Fumé Blanc at home will know what they paid for it, as opposed to what it is on the restaurant's wine list . . . but you don't think that the person who spends $16.99 on a 750ml bottle of Beefeater's feels that a $10 Beefeater Martini is feeling a wee bit taken to the cleaners???

                  2. d
                    duck833 Jul 17, 2008 07:20 PM

                    If I owned a restaurant I would want my customers happy. Best way to make them happy is to have them drink more wine. Reasonable markups will help sell more wine and bring in more customers.

                    Having a wine friendly restaurant is one of the top factors in deciding where we dine. We are looking for good food but also good wine at reasonable prices.

                    1. z
                      zin1953 Jul 17, 2008 05:41 PM

                      One needs to remember that not every restaurant buys the same wine for the same price.

                      FROM THE HISTORICAL PERSPECTIVE . . .

                      Winery (or Wholesaler's) Suggested Retail Price, aka WSRP, is the case one bottle price plus 50% mark-up for a 33% begining gross profit (BGP) margin.

                      That is, for example, a wine which costs (before any applicable discounts or post-offs) $240 per case of 12/750ml bottles carries a WSRP of $15.

                      $20 per btl. wholesale + 50% markup ($10) = $30 retail /// 33% of the $30 retail = $10 profit.

                      Some retailer may work on a thinner margin, but the "winery suggested price" still exists according to the above formula. Typically, but not always, those who do work on a thinner margin do not give 10% case discounts, though this varies with the retailer.

                      Restaurant markup has escalated over the years. It used to be double wholesale (2x$20=$40). Then, double retail became the norm (2x$30=$60). Now, triple retail, or higher, is common these days . . . depending upon the specific restaurant and "what the market will bear."

                      Some restaurants do indeed pay "case one wholesale" (also known as "frontline") for their wine. To continue with the above example, that would mean they actually do pay the $240/case. Some may buy enough volume to quality for family plan discounts, or brand discounts, or stand alone discounts, or by-the-glass promotional discounts, etc., etc., etc. Depending upon the buying power of the establishment, the restaurant may pay as much as 25% less than frontline.

                      In SOME control states, however, restaurants actually pay RETAIL price for the wine.

                      What I always find amusing is that, as was mentioned above, no one complains about the $10 martini. Let's take a high-end Gin with no discounts -- Anchor's Junipero Gin. The whoelesale per bottle price of a 750ml is, IIRC, around $22. Let's call it $25. There are 25.4 ounces in a bottle, and let's ignore the four -tenths. So, let's presume it costs the restaurant $1 per ounce. So a Martini made with two ounces of Junipero Gin costs $2 in distillate, next to nothing in Vermouth for a very dry martini, ice, and labor. OK, it costs (being generous) $2.50. Take a 400% markup and sell it for $10.

                      Suffice it to say Bombay, Beefeater, Tanqueray, Hendrick's, etc., ALL cost less per ounce . . .

                      So people complain about a 200% markup on wine, but not the 400+% markup on cocktails. Let's not get started on the markups on bottled beer, DRAUGHT beer, soft drinks, bottled water, iced tea, coffee or -- Lord knows! -- espresso!!!

                      You know it's the popcorn that makes the profit for the movie theatres; ticket prices roughly break even.

                      Cheers,
                      Jason

                      8 Replies
                      1. re: zin1953
                        Bhutani Jul 17, 2008 08:25 PM

                        One issue with the cocktail comparison, Jason, is that you are talking about the restaurant's charge on individual drinks and comparing that to the price of the bottle. There is obviously going to be an extra premium when you portion out the bottle as there usually is with wines by the glass. A more fair comparison would be wines by the glass and cocktail prices. Nonetheless, I understand your point but I think most take issue with the absolute dollar amount more so than the percentage markup when discussing more expensive wines.

                        1. re: Bhutani
                          c
                          chickstein Jul 18, 2008 05:58 AM

                          Usually, the price of a wine by the glass is equal to the price of a bottle. So if the wine costs the restaurant 8.00 a bottlw they charge $8.00 per glass. The restaurant then gets 4-5 glass of wine out of a bottle. With liquor you get 12-14 drinks out of a bottle.

                          1. re: Bhutani
                            z
                            zin1953 Jul 18, 2008 07:04 AM

                            >>>. . . but I think most take issue with the absolute dollar amount more so than the percentage markup when discussing more expensive wines. <<<

                            First of all, see my reply to Jacob (jpc8015) below.

                            Secondly, most restaurants today known for having great lists -- both in terms of total selection and the quality with which they are chosen -- do NOT mark up their wine list on a straight percentage, taking a smaller percentage markup on their most expensive wines (Champagnes generally notwithstanding), as well as on a few select "gems" hidden throughout the wine list.

                            I am not saying their wines are not overpriced. Restaurant Gary Danko, for example, has a number of outrageously priced wines, yet I never feel ripped off when I buy a bottle (usually two) off their list. Why? Because they always have a number of wines they take lower markups on and are, as a result, actually quite reasonable.

                            Then there is the example of the restaurant/wine bar where I worked. We poured 20+ wines per night by-the-glass, and our wine list was 200 wines. Everything on our list was priced at a flat $5 over WSRP. This was also back in the 1980s, and were I to do this again, I'd probably mark wines up on a sliding scale of between $10-20 over retail.

                            Keep in mind that WSPR builds in a 50% markup for a 33% BGP. So if the retail price of Chateau Cache Phloe Napa Valley Cabernet is $120, the most I (as restaurant wine buyer) would have to pay for that bottle is $80. There is (within limits) a fixed cost when it comes to glassware, refrigeration, and so on; in other words, it doesn't matter if one is serving Dom Pérignon or Korbel, Château Lafite or Chateau Cache Phloe -- the actual cost of service is the same. So if I tack on $20 to the retail, customers get a great buy on that $120 retail bottle (paying only $140 for it), and I will have made $60, or 42.8% BGP. If we're talking about a bottle that cost me only $20, meaning it has a WSPR of $30 and I add on an extra $20, the buy for the customer is still pretty good -- that $30 retail bottle is $50 on the list, and $50 is still (sadly) somewhat reasonable. Meanwhile, I'm making $30 on the bottle, or 60% BGP!

                            Where your costs DO go up -- you're quite right -- is with by-the-glass service. It's not like you need to have a trained bartender, however; anyone can pour wine into a glass. That said, I'll tell you how we figured out our glass prices . . . .

                            Again, I would ask that you keep in mind a few simple points. In California, bottles of wine are taxed on the restaurant check. So, too, are cocktails, but generally, bars include the sales tax in the cost of the drink. So a bottle may be $25 PLUS sales tax, whereas that $10 Martini (in most places) already includes the sales tax.

                            As I said, we poured 20+ wines per night by-the-glass, and our wine list was 200 wines. We would take our wine list price (again, a flat $5 over WSRP), add the sales tax, and divide by five (rounding up to the closest nickel). Then we'd pour six glasses per bottle, thereby making the same margins on the wine PLUS one glass of "pure profit."

                            Cheers,
                            Jason

                            1. re: zin1953
                              alanbarnes Jul 18, 2008 08:08 AM

                              So is it an unreasonable business practice for a restaurant owner to use the pricing paradigm you described? Lots of folks who take the restaurant side of things here talk about the exorbitant hidden costs involved in maintaining a cellar, buying glassware, and properly handling and serving wines. Was wine a profit center for your former employer, or was it a break-even proposition to bring people into the restaurant?

                              Seems to me that the system you described would result in the restaurant selling a lot more wine at significantly higher price points. When the QPV goes up with the price point, I for one am a lot more likely to splurge on an expensive bottle of wine in a restaurant.

                              The converse is also true. If a restaurant has confiscatory wine prices, there's no way I'm blowing big bucks for a bottle. Maybe not even small bucks, either.

                              There's actually a current CHOW wine blog entry about Lahaina Grill, which has some of the most egregious wine pricing I've ever seen. The author claimed that "wherever I actually knew the retail price, the markup seemed perfectly fair." http://www.chow.com/tastingnotes/5925.

                              Apparently he and I are familiar with retail pricing on different wines. I mean, come on--$800 for a '92 Ridge Monte Bello? DW and I had dinner Monday night at a restaurant where the same wine was $200. Admittedly this is a place that has value-oriented pricing, but still.

                              Given my limited familiarity with wine pricing, all it takes is one egregiously overpriced bottle to make me wonder about the pricing of the rest of the list. And when faced with the possibility that I'm paying $100 for a $20 wine, I'll stick with ice water, thankyouverymuch.

                              I guess if half your customers refuse to be suckers, but the other half generate more profit than the amount lost as a result of overpricing, you've made a rational business decision. Still leaves a bad taste in my mouth, though.

                              1. re: alanbarnes
                                z
                                zin1953 Jul 18, 2008 08:15 AM

                                Oh, no -- we made money on wine sales! it was a profit center. We sold a LOT of wine . . .

                          2. re: zin1953
                            c
                            chickstein Jul 18, 2008 05:56 AM

                            Well said Jason.

                            1. re: zin1953
                              Midlife Jul 19, 2008 11:34 AM

                              Jason,

                              Re your comment: "Winery (or Wholesaler's) Suggested Retail Price, aka WSRP, is the case one bottle price plus 50% mark-up for a 33% begining gross profit (BGP) margin."...... The invoices I get from all the major distributors in SoCal show a net bottle cost price and a suggested sell that is calculated at 25% gross profit, NOT 33%. BTW (I'm sure you know this, but) that suggested retail has nothing to do with what the winery might actually suggest....... it is what the DISTRIBUTOR suggests. As a small merchant that 25% figure makes my skin crawl every time I think of it.

                              On the issue of restaurant mark-ups, I find 2 to 3 times street retail to be normal here. That is actually closer to 3 to 4 times the restaurant's actual cost, but the issue is always discussed in terms that the consumer can better relate to, which is the retail they see when they shop. And that may have something to do with why there is little discussion of mixed drink prices. Consumers don't walk into Bevmo and see a shelf price on a mixed mojito or martini.

                              1. re: Midlife
                                z
                                zin1953 Jul 19, 2008 03:38 PM

                                The Winery Suggester Retail Price -- which, BTW, may in fact be a term I made up -- just to play off the "MSRP" people know from automobile sales -- is what the winery charges in their tasting/sales room. It is based on the California Fair Trade Act, which served as a model for the nation.

                                "In 1931, California became the first state to pass fair-trade laws. These laws made it legal for a manufacturer to enter an agreement whereby the purchasing retailer, the signor, could resell a product only at a prescribed minimum price. In 1933, California amended these laws to make such an agreement binding on nonsignors. The amendments made minimum-price agreements enforceable against any retailer who had knowledge of another retailer's agreement with the manufacturer." See http://law.jrank.org/pages/6724/Fair-...

                                Under this system, the minimum retail price had to be posted -- by either the winery or the wholesaler -- with the California Dept. of Alcoholic Beverage Control. The formula was 50% markup = 33% BGP. The only way to sell a bottle of wine for less -- legally -- was with a case discount (10% off on a case, mix or match).

                                Fair Trade was declared unconstitutional in California in the mid-to-late 1970s, and so-called "discounters" began using a lower markup -- 33% (25% BGP). This all but did away with case discounts.

                                Standard retail markup in many industries is "keystone" -- 2x wholesale = retail, or wholesale +100% = retail (50% BGP). Standard for wine -- the so-called WSRP, the remnants of the Fair Trade era (and what most wineries use in their Tasting Rooms) -- is wholesale + 50% = retail (33% BGP). The so-called "street price," however, is -- especially in large urban markets -- to be SWS' example: wholesale + 33% markup = retail (25% BGP). Some retailers work even thinner, while others mark some wines quite thin and other wines more "fat" -- depending upon their availability . . .

                            2. d
                              DMM25 Jul 17, 2008 04:33 PM

                              Having worked in restaurants for many years and now living in the Willamette valley and being part of the wine scene here, this topic always fascinates me. 99% of restaurants operate on very small profit margins and they only have 2 ways to make their money food and beverage. A 100% mark up is perfectly ok with me, 200% is pushing it but it would depend on the bottle.

                              To think that all you get is the cork pulled and the glasses filled for this extra mark up is not a correct way of thinking. Some how they have to pay the hostesses, the servers, bussers, cooks, management, the electricity, gas, water, flowers and the list goes on and on and on and on.

                              In addition to all that they have been storing the wine (hopefully at the proper temp etc). They are providing the glasses. Here is a question to ask when is the last time you felt bad about breaking a wine glass in a restaurant? Even with cheap glasses the cost of breakage is astronomical and most places probably see 5-10 break a night.

                              Sorry to rant but the mark ups are there for a reason and you always have the option of bringing your own bottle (just please make sure its not on the list) or just order a cheaper bottle.

                              1 Reply
                              1. re: DMM25
                                Bhutani Jul 17, 2008 08:08 PM

                                Bringing your own bottle is not allowed in a number of states, including Texas (where the OP is discussing), for those restaurants with a liquor license.

                              2. alanbarnes Jul 17, 2008 03:16 PM

                                While restaurants are certainly entitled to sell their wines for as much as the market will bear, I am extremely reluctant to pay more than double the retail price for a bottle. If a place posts its wine list on the internet, it's especially easy to check things out and make a decision about whether to BYO and pay corkage.

                                All other things being equal, I will always take my business to a restaurant that doesn't gouge on wine. I don't expect everyplace to do like Passionfish in Pacific Grove, CA and treat their wine list as a non-profit venture (they price each of their wines just a few dollars over retail, whether it's a Carr Sauvignon Blanc for $15 or a Bond Cabernet for $300), but I don't like feeling that I've been taken advantage of, either.

                                1 Reply
                                1. re: alanbarnes
                                  p
                                  pinotho Jul 17, 2008 03:22 PM

                                  That's the heart of it , isn't it , that feeling that you are being taken advantage of..........

                                2. w
                                  whiner Jul 17, 2008 02:39 PM

                                  My general rule is that I expect a very nice restauarant to want to make $35 for serving a bottle of wine from its own cellar. Therefore, a wine that retails for $15 ($10 wholesale) I'm not at all surprised to see selling for $45 on a wine list at a "high-end" restaurant. However, once a certain basic threshold is cleared, I agree that over 100% over retail is too much.

                                  5 Replies
                                  1. re: whiner
                                    p
                                    pinotho Jul 17, 2008 02:58 PM

                                    totally agree with whiner and Bhutani that it is the dollar amount of profit that needs to be discussed , not a multiple , not some percentage of markup . Everytime the restaurant Industry sees one of these "what is the correct percentage of markup" discussions in print , they call their publicists and give them a bonus .

                                    To carry their business model to its logical conclusion , a restaurant pays $1500 for a bottle of Screaming Eagle , and they should receive a $3,000. profit on that bottle for bring it out , removing the cork , and pouring it in a glass.

                                    That's absurd , and I bet there are restauranteurs right now who would tell you with a straight face that $3,000 profit on one bottle of wine is justified .

                                    1. re: pinotho
                                      MMRuth Jul 17, 2008 03:02 PM

                                      What do you think should happen with a bottle that the restaurant bought at X price, cellared for years, and it's now worth Y (say that Y is quite a bit higher than X)? Should the price reflect a mark up off X or Y?

                                      Thanks.

                                      1. re: MMRuth
                                        p
                                        pinotho Jul 17, 2008 03:21 PM

                                        Y.........

                                        1. re: MMRuth
                                          alanbarnes Jul 17, 2008 03:24 PM

                                          The cost and risk inherent in cellaring a wine for years should be reflected in the price of the wine, whether it's sold in a restaurant or a wine store. So long as the vintage is available, the current retail price of the wine is a good indication of the value of that cost and risk. So the price should be based on Y, not X.

                                        2. re: pinotho
                                          Frodnesor Jul 17, 2008 03:07 PM

                                          That's fine by me. I'm perfectly happy to have shmoos who will pay $4500 for Screagle subsidizing more reasonable markups on the wines in the price range where I'm buying. More power to 'em.

                                          Most (good) restaurants do taper the markup on the higher end of the price range but for me, once you get over a certain point (and that point is *well* short of four figures), I'm not playing any more so please gouge them for all you can get.

                                      2. jfood Jul 17, 2008 01:53 PM

                                        Three times the mark-up seems reasonable.

                                        Heck Pelligrino purchased for $1.00 goes for $6-10.

                                        13 Replies
                                        1. re: jfood
                                          steve h. Jul 17, 2008 02:01 PM

                                          jfood knows food. wine? not so much.

                                          1. re: steve h.
                                            jfood Jul 17, 2008 02:27 PM

                                            correct jfood knows diddley about wine. But what is the correct mark-up and if it is a decreasing percentage, i.e 3x for <$25 retail; 2.5x $25-40; 2x $40-100; MP > $100, does this same theory hold true with the tip. jfood has been battered in the past on the tip should also follow a decreasing percentage on expensive wines, and if the restaurant, the person taking the equity risk, has decreasing margins as price increases, then the same should hold true for the variable revenue participant in the equation.

                                            So what should mark up be if not 3x, this dog thinks he'll see a lower number.

                                            1. re: jfood
                                              steve h. Jul 17, 2008 03:03 PM

                                              2x is tops. 1.5x pretty standard. some places are happy to advertise less than 50 percent on every bottle.

                                              it's an art, not a science. lots of variables. best to know retail when ordering and determine your own price/pain threshold.

                                              the whole tipping-based-on-the-total-including-wine thing is sketchy at best. i haven't formed a coherent response yet but i'm a bit grumpy these days and will work on it.

                                              1. re: steve h.
                                                w
                                                whiner Jul 17, 2008 03:10 PM

                                                "the whole tipping-based-on-the-total-including-wine thing is sketchy at best. i haven't formed a coherent response yet but i'm a bit grumpy these days and will work on it."

                                                Unless you order a trophy wine, you tip on the total. I have never met a person who leaves $10 on a $50 bottle of wine but not also $40 on a $200 bottle of wine. A $500+ bottle of wine? Ok, maybe that's beginning to be a differet story.

                                                1. re: whiner
                                                  steve h. Jul 17, 2008 03:15 PM

                                                  i think you're making my point: i.e., where does that price point reside? lots of variables.

                                                  i'll try to think it through and report back.

                                                  1. re: steve h.
                                                    w
                                                    whiner Jul 17, 2008 03:58 PM

                                                    Ok, but seriously, how often do you go out and order a $1k wine? In 99.99% of real world scenarios, it is a straight tip and I fear discussion about the incredibly rare instances where it might be appropriate not to take a straight tip just tend to confuse those who don't realize just how expesive the wine would have to be before you start doing that.

                                                    BTW: there are only two variables I can think of

                                                    1) Predictability (eg. why is the wine on the list? Just for show, or do they actually think someone might order a wine in that price range?)

                                                    2) REALLY?!?!?!?! (eg. if food was $125/p, is a table of four really ever going to take the time to "figure out" the tip and have that number be well over a thousand dollars?)

                                                    1. re: whiner
                                                      steve h. Jul 17, 2008 06:24 PM

                                                      not sure i follow your point or your math. sorry.

                                                      deb and i order wine with our meals. sometimes we order more than one bottle. chances are the wines we order are pretty good and not great. i don't know anyone who orders $1000 bottles of wine, hence my confusion over your post.

                                                      1. re: steve h.
                                                        w
                                                        whiner Jul 17, 2008 06:53 PM

                                                        "i don't know anyone who orders $1000 bottles of wine..."

                                                        EXACTLY!

                                                        I wrote: "Unless you order a trophy wine, you tip on the total. I have never met a person who leaves $10 on a $50 bottle of wine but not also $40 on a $200 bottle of wine. A $500+ bottle of wine? Ok, maybe that's beginning to be a differet story."

                                                        My point here: Within the context of the real world, you tip on the total but that there may be some exceptions for outrageous circumstances.

                                                        then YOU wrote:

                                                        "i think you're making my point: i.e., where does that price point reside? lots of variables."

                                                        I don't know if I was making your point or not. My point was that you'd need (what would be to most of us) a bizarre circumstance in order to justify not tipping on the total.

                                                        My next post, then gave the two "variables" that could cause a person not to tip on the total.

                                                        1- if no one could reasonably believe people were going to be ordering wines in that price range on anything approaching a regular basis (eg. more than once per month). EXAMPLE: Restaurant's second most expensive wine is $300. Then they have 1 "trophy" 1k wine that they have 1 bottle of just to say they have 1982 Mouton. You see 1982 Mouton on the list for 1k and even though the total food bill, even after tax, for you and your date is $100, your tip would be $220 if you give a striaght 20% -- which isn't remotely close to what ay server at that restaurant could ever expect to have happen for a 2-top.

                                                        2- It is reasonably predictable that tables will be going nuts on wine, but the numbers we are talking about are just so rediculous that obviously you aren't expected to give a straight 20%. EXAMPLE- VeRiTas in Manhattan... known all over the country for its wine list. People go there to do verticals of Harlan Estate or first growth Bordeaux or DRC. Literally, the majority of the list is over $500/bottle with a sizable percentage over 1k/bottle. Tables really do spend thousands on wines there every night. But, even though a server can reasonably anticipate that at some point a table of 4 he waits on will be ordering 5k+ worth of wine, I don't expect that a server there assumes he will be tipped more than, say, about $150 for every bottle he opens.

                                                        The point that I was trying to make in that post when I wrote:

                                                        "how often do you go out and order a $1k wine? In 99.99% of real world scenarios, it is a straight tip and I fear discussion about the incredibly rare instances where it might be appropriate not to take a straight tip just tend to confuse those who don't realize just how expesive the wine would have to be before you start doing that."

                                                        was that, to me, the discussion of when you don't take a straight tip is a thought experiment. In reality, unless you are acting so far outside normal expectations as to make the discussion somewhat silly, you simply tip on the total bill.

                                                        :-D

                                                2. re: steve h.
                                                  Frodnesor Jul 17, 2008 03:40 PM

                                                  Where are you eating that you'd call 1.5x standard and 2x tops? I'm in Miami and I jump up and down for joy any time I see something at 1.5x.

                                                  1. re: Frodnesor
                                                    steve h. Jul 17, 2008 04:00 PM

                                                    eat and drink at a lot of good places.

                                                    state-side, we split time between east coast and west-coast (northern california). we usually spend time in asia in december and rome in march. just back from london. new orleans is october. and so on.

                                                    you have to know retail prices at the local market and make your decisions. no easy answers.

                                                  2. re: steve h.
                                                    z
                                                    zin1953 Jul 17, 2008 06:55 PM

                                                    >>> 2x is tops. 1.5x pretty standard. some places are happy to advertise less than 50 percent on every bottle. <<<

                                                    see below.

                                              2. re: jfood
                                                p
                                                pinotho Jul 17, 2008 02:01 PM

                                                "three times the mark-up seems reasonable".....adnd on what planet would that be ??

                                                1. re: pinotho
                                                  Bhutani Jul 17, 2008 02:13 PM

                                                  Three times mark-up may be reasonable for a $10 wine (maybe) but not when you get into wines in the $40 to $50 range . $150 for a $50 retail wine is excessive in my opinion. In cases like that, the absolute $$ is the issue.

                                              3. p
                                                pinotho Jul 17, 2008 01:45 PM

                                                Dear LastWyf : My initial thought was that $125 is reasonable restaurant price for a Barolo . 2004 is a good year for Nebbiola in Piedmont , and Vietti is a well known producer . My first guess was that the wine would go for at least $75 at retail , as Barolos/Barbarescos are never cheap . I have to think that you are mistaken about the $40 retail , as that is just very hard to believe . It would not have made sense even before the runup in the Euro over the last few years . Bottom line , IMHO , restaurants gouge their wine drinking customers constantly , but not in this case......

                                                2 Replies
                                                1. re: pinotho
                                                  alanbarnes Jul 17, 2008 04:44 PM

                                                  $55 retail, $40-50 street price.

                                                  http://www.winechateau.com/vsku1449509.html?utm_source=Google%20Products&utm_medium=feed&utm_campaign=VIETTI%20BAROLO%20CASTIGLIONE%202004

                                                  http://www.klwines.com/detail.asp?sku=1039792

                                                  http://www.grandwinecellar.com/vsku14...

                                                  1. re: pinotho
                                                    LastWyf Jul 20, 2008 07:47 PM

                                                    Well, just to check it out, I saw it last Friday at Central Market (whose prices are NOT the cheapest in town) for $44.99 .

                                                  2. n
                                                    newJJD Jul 16, 2008 08:06 PM

                                                    While I personally feel that anything more than 100% mark-up on retail - especially for wines 5 years old or less - is excessive, in the end it is the restaurants choice to set price and my choice to agree to those prices or not.

                                                    For older wines, I am more lenient, as I can appreciate that the restaurant has either purchased the wine recently at a higher retail price, or they have properly stored / cellared the wine for years / decades.

                                                    I think it is the fact that the dollar number gets to be quite high that makes people upset with wine. For example if a $100 retail bottle was listed for $500, there would be complaints... the sentiment is that being charged $5 for every $1 worth of wine is excessive. Yet the $5 pint of beer that costs less than $1 is perfectly acceptable, as is the $10 martini with $1-2 worth of alcohol in it.

                                                    So what is it people? There are very few, if any, threads complaining about beer / liquor mark-ups, but a plethora of threads on excessive wine prices. Is it the % or the raw $$$ increase that is the problem?

                                                    19 Replies
                                                    1. re: newJJD
                                                      c
                                                      chickstein Jul 17, 2008 05:50 AM

                                                      So what is it people? There are very few, if any, threads complaining about beer / liquor mark-ups, but a plethora of threads on excessive wine prices. Is it the % or the raw $$$ increase that is the problem?

                                                      I could not agree with you more!!! No one ever complains about the $10.00 martini or the steak that costs $15.00 but is $45.00 on the menu, and more often than not is not cooked properly (I digress). But wine is fair game.

                                                      To the OP-What you paid for the wine in the restaurant is quite reasonable. Please remember, in some states retailers pay LESS for wine than a restaurant (TX is one of them). Retailers have the ability to purchase in bulk, where a restaurant usually purchases a case or less incurring more charges (delivery, broken case charge). I encourage you to do a search on the Wine board for this topic.

                                                      1. re: chickstein
                                                        Frodnesor Jul 17, 2008 02:33 PM

                                                        There's a component of any markup that, aside from profit margin, accounts for service, glassware, etc. which perhaps explains why most people don't have a problem with paying $5 for a $1 beer. It costs a certain amount to serve any beverage (even if we get tap water for free), which is why reasonable corkage for BYOB is also seen as, well, reasonable. Plus, yes, it is easier to ignore when its $1 vs. $5 as compared to $100 vs. $500.

                                                        My personal rule of thumb is that anything at or under 2x retail is reasonable, anything over 3x retail is a ripoff (unless it is very rare, hard to find, etc.), and most things in between I will pay but with increasingly less joy as it works its way up that scale.

                                                        This one in particular? Wine-searcher does indeed have multiple retailers in multiple states selling this particular bottle at around $40, so pinotho, OP is not mistaken (though that doesn't necessarily mean you can get it in TX at that price). And it's a current release and not incredibly hard to find. Probably more on the ripoff than the reasonable side of things.

                                                        1. re: chickstein
                                                          LastWyf Jul 20, 2008 07:55 PM

                                                          Quesque c'est OP?

                                                          1. re: LastWyf
                                                            c
                                                            CulinaryKate Jul 20, 2008 08:45 PM

                                                            Original post, I think

                                                        2. re: newJJD
                                                          b
                                                          bulavinaka Jul 19, 2008 07:37 AM

                                                          I think it's the perception of "owning" the bottle of wine. I can go to any number of local winehouses and pick up the exact commodity for far less than what the restaurant will charge, so in the mind of the consumer, "why should I pay 3x for something I can get at BevMo for x..." Also the commitment to buying a bottle of wine - even the lower tier stuff - can easily be the cost equivalent of a meal or two or three. An average bottle of beer or a mixed drink is more easily justifiable given its price range relative to a bottle of wine...

                                                          1. re: bulavinaka
                                                            z
                                                            zin1953 Jul 19, 2008 10:03 AM

                                                            >>> An average bottle of beer or a mixed drink is more easily justifiable given its price range relative to a bottle of wine... <<<

                                                            How do you figure?

                                                            1. re: zin1953
                                                              b
                                                              bulavinaka Jul 19, 2008 10:21 AM

                                                              I'm not saying it is... I think this is the perception of the consumer at large. Most can stomach paying up to $10 for some kind of alcoholic beverage. A whole bottle of wine is a much larger investment. I know you know wines and enjoy them with vigor. I think the majority of folks don't fall in that category. To this group, a glass will suffice. A bottle or a wine flight? No way...

                                                              1. re: bulavinaka
                                                                z
                                                                zin1953 Jul 19, 2008 03:15 PM

                                                                It has nothing to do with MY enjoyment of wine.

                                                                If you look around a restaurant during dinner -- at least when I look around the majority of restaurants that I dine at -- a majority of tables have a bottle of wine on them; indeed, a sizable majority, at that. Some parties of four-to-eight people may even go through 2-3 bottles of wine during dinner.

                                                                Yeah, OK -- not the neighborhood pizza parlor or Sizzler, but this isn't limited to the Gary Danko's, French Laundry's, or Chez Panisse-type of establishments either.

                                                                1. re: zin1953
                                                                  b
                                                                  bulavinaka Jul 19, 2008 06:34 PM

                                                                  I need to quit slummin' it and start going to your favorites... Obviously we live in two different worlds...

                                                                  1. re: bulavinaka
                                                                    p
                                                                    Pigloader Jul 20, 2008 05:20 AM

                                                                    Truthfully, though, that has nothing to do with Jason's original point, which is, (i think) that a lot of consumers are being duped into paying too much for wine at restaurants. This is due in large part to the assumption on the part of most upmarket restos that most folks are not going to show the due diligence that the OP did, and, as such, are not going to recognize the disparities inherent on many winelists. As someone in the business, I think it's a shame that restaurants, esp. those in big cities, take advantage of their customers in this fashion.

                                                                    1. re: Pigloader
                                                                      b
                                                                      bulavinaka Jul 20, 2008 08:23 AM

                                                                      I'm not sure that either of us contend the issue of high mark-ups. My point is that the average consumer - in this case Joe Restaurant Diner - has a price limit on his alcoholic beverage expenditures. My experience has been that the $10 area is the threshold for the average diner - and this is reflected in the prices that the majority of restaurants price these products at. Again, investing in a mixed drink, a beer, a glass of wine, that's an easy-do for most. Investing in a bottle of wine has a psychological barrier. Owning the bottle to enjoy during a meal is perceived as a major investment to the majority of diners. For some, it's an issue of paying two to three times retail. Many folks feel the "admission price" for enjoying a good wine that would run $40-$60 retail has a poor "return on investment" when a restaurant will easily charge over $100 for the same bottles. Many diners will compare the price of a bottle of wine to the cost of their meal and if $(wine) > $(meal), many bow out of the proposition. The same simple economic model applies to shipping commodities. Many see the cost of shipping to be a key factor as to whether or not they should purchase a given product. If the cost of shipping is anywhere within the range of the cost of the product, many will balk at the proposition. Other will choose to complete the purchase because to them - for what ever reason - they perceive value in the proposition. For others, it's an issue of the table being able to consume the entire bottle(s). For many, it's knowing enough about wines to choose the right one for their meals. The whole culture of wine, particularly in restaurants, is cult-like in the perception of many - kinda looking from the outside in.

                                                                      1. re: bulavinaka
                                                                        z
                                                                        zin1953 Jul 20, 2008 10:06 AM

                                                                        Not nit-picking, just attempting to have a dialogue . . . .

                                                                        >>> My experience has been that the $10 area is the threshold for the average diner - and this is reflected in the prices that the majority of restaurants price these products at. <<<

                                                                        OK, so let me ask you again: you can easily buy a 750ml bottle of Beefeater's Gin for $16.99 (Beverages, and more!). You don't think $10 for a Martini is a ripoff???

                                                                        In some places, you might be able to find Beefeater's for less; in others, more. At $16.99 for 750ml, the cost per ounce is 66.9¢ Again, this is retail, not wholesale. OK, two ounces of gin, rounded off, is $1.34.

                                                                        Cinzano, Martini & Rossi -- you can easily find a 750ml bottle of Dry Vermouth for $6.99. That equals 27.5¢ an ounce, and you use far less than an ounce in a martini.

                                                                        How much is one -- oh, let's be generous, TWO olives???

                                                                        And $10 is not a rip-off???

                                                                        >>> Again, investing in a mixed drink, a beer, a glass of wine, that's an easy-do for most. Investing in a bottle of wine has a psychological barrier. Owning the bottle to enjoy during a meal is perceived as a major investment to the majority of diners. <<<

                                                                        I've never heard anyone . . . EVER . . . phrase it that way. You don't own a bottle of wine, you drink it. You're not "investing" in a bottle of wine in a restaurant, any more than you are "investing" in that entrée that you order in the same restaurant. Can it be re-sold for a profit somewhere? Will that soufflé increase in value if you hold it for several years?

                                                                        Perhaps part of the problem is that you're looking at it from a financial perspective, rather than one of enjoyment. (You a broker?) When I look at a wine list -- OR, for that matter, pull a wine out for dinner at home -- I look first and foremost at what wine will compliment the food we will be eating. Secondly, and clearly this doesn't apply to opening a bottle at home, I look at the price(s) and find one at a price I am comfortable paying.

                                                                        And what is all this talk about shipping, and what does this have to do with anything?!?!? I'm confused. Obviously.

                                                                        * * * * *

                                                                        >>> For others, it's an issue of the table being able to consume the entire bottle(s). <<<

                                                                        You can take the bottle home -- at least in the State of California. This will, however, vary by state, and there is no doubt that this IS a consideration for some. This is why there are half-bottles (375ml instead of 750ml), and why there are wines available by-the-glass. This, too, will vary according to state law.

                                                                        >>> The whole culture of wine, particularly in restaurants, is cult-like in the perception of many - kinda looking from the outside in. <<<

                                                                        I find the whole culture of commodities, securities, and investments to be cult-like, with terminology deliberately selected to obscure, confuse, and mystify the entire "World of Wall Street."

                                                                        C'est la vie . . . all I know is that I've spent a really long time trying as best as I can to DE-mystify the world of fermented grape juice in the classes that I teach . . . .

                                                                        No one I know IN the wine trade seriously wants to preserve the "mysterious" aspect of wine. The more "mysterious" wine is, the more people do NOT drink it. And how does that benefit the wine trade?

                                                                        In 2005, the per capita consumption of wine in the United States was 8.69 liters (2.295 gallons). A case of wine (12/750ml bottles) is 9.0 liters, or 2.377 gallons. The U.S. ranks 60th on the list. Some of the countries ahead of the U.S. include Canada, where the per capita consumption is 10.48 liters; Ireland, 14.03 liters; New Zealand, 16.68; Uruguay, 23.31; Italy, 48.16; France, 55.85;

                                                                        See http://www.wineinstitute.org/files/Pe...

                                                                        Clearly, the US has a long way to go . . .

                                                                        Cheers,
                                                                        Jason

                                                                        1. re: zin1953
                                                                          b
                                                                          bulavinaka Jul 20, 2008 04:56 PM

                                                                          Dialogue is what it's all about... :) I think we're running along in tangents quite a bit, and then bump hips here and there. I agree with your premise on the Beefeaters/martini example - I never questioned it for that reason. In fact I agree with most of what you say as I tried to imply in my response to Pigloader. My premises are based on the Typical Consumer - probably up to the 80th percentile of restaurant consumers in the US if I had to make a rough guess. It's not a matter of the COST structure of the drink - it's what is within the reasonable $ limits of what the AVERAGE diner considers to be an attainable PRICE. Cost does not typically equal price or restaurants would be out of business. If we took the same logic that you are using in the martini reference to other dining experiences, sushi should be pocket change, and many of the better salads should be on the dollar menu at McDonald's. Besides, most folks are willing to pay ten bucks for a martini because unlike bringing your own wine, I don't think there is a culturally accepted practice of bringing your own martini or the fixing to make your own at tableside. Maybe I'm being too subtle at times or too analytical at other times. And no, I'm not a Wall-Streeter - don't know if that's a back-handed compliment :). But we all make value judgements on everything we do and this ultimately pans out in decisions made in what restaurants we choose and what we decide to enjoy at those chosen places.

                                                                          If I am the first in the world to phrase it as "owning a bottle," then I get points for originality. This refers to buying a whole bottle versus a glass or two. Buying the bottle typically is a much greater $$ commitment than buying a glass, even at the restos with lower pricepoints. It also obviously allows for less variety or uneven pairing if everyone at the table isn't on the same board food-wise. It has nothing to do with long-term investing. It's a value judgement that one makes as to whether it will be worth the much higher price of a whole bottle of wine (plus the price of sommelier services, etc., if applicable at whatever the place is). Furthermore, if I don't have my mobile phone version of Wine Spectator archives available, I probably won't be familiar with many of the resto's choices - buying a whole bottle of something I'm not sure about and knowing I'm paying high markup on it leaves a big question mark on my forehead. I think your view of what a meal entails is very plain to you, but otherworldly to many.

                                                                          I can enjoy a good meal like most folks - but I, like most folks don't have a lot of money to throw at places like those that you mentioned in the Bay area or in LA. Those that you list are destination/special occasion places for me personally. For those (like you it appears) who frequent places in that category of restaurant, yes - wine is an integral part for the majority of patrons at places of that caliber. You and others frequent places like that because aside from being able to afford to regularly dine at places like those, wine is a given. I think your perception (especially now that I know you teach wine classes) is very different from Joe-Average Consumer. This category of restaurants in your lists is considered by most to be in the upper echelon of dining experiences which translates into high-dollar dining. These are places that most have a hard time justifying the price of a meal, let alone a whole bottle or two. Again - I'm not talking about those that fall within the 81st to 100th percentile of diners who are far more demanding in terms of dining and financially capable - I'm talking about the majority of diners who can afford a $10 drink. Those that dine at places like those that you mention are typically not affected by price for the most part. Whether they spend $50, $100, $150, or even higher per person - particularly if a $80+ bottle or two is on the tab, it's of little consideration to them as they are willing to spend that for a great dining experience - most likely because they have a much higher level of disposable income or at least have enough to afford their dining habits and cut back elsewhere.

                                                                          OMG - you imply that I'm a Wall-Streeter again! HUFF - WHY I NEVER!! ;)

                                                                          I'm far from being a wine afficianado, and I intend no snobbery in that remark. Wine is truly a whole other category particularly when it comes to dining. It's one of those things that is a combination of science, art and a little bit of luck sprinkled with the dust gathered from the wings of angels. Again, this is second nature to you. And "De-mystifying" old grape juice in a bottle is great, but your angle on what is a dining experience and how wine plays into it is far more unique, matter-of-fact and specialized than most. As much as you may be attempting to demystify this great tradition, maybe your perspective focuses on the enjoyment aspect a lot more than the real financial consideration of wine's superb yet potentially costly proposition that most consider it to be in the restaurant environment which is fine for you - in fact, more power to you! My reference to wine culture in restaurants being cult-like to many is not to say that all wine-heads are snobs and that only the privileged should partake in it. To the contrary - everyone in the wine world wishes all would partake (just in the lesser vintages and save the best for them ;)). It is the average consumer who is at fault for not trying to learn more about wine culture and giving it a more serious try, as your stats point out. And that is another reason why so many avoid the whole situation of wine by the bottle in restaurants. Sommelier - how do you spell that? Decant? Wine flight? WTF? Pazzz... Sincerely, Joe-Average Consumer

                                                                          I can appreciate a good barolo or shiraz with my steak - but not at Cut or Wolfgang's. "Owning" a bottle of Dead Arm shiraz (there - I said it again) for a great steak meal at home is an easy-do for me. Paying $50 times whatever a resto decides to further mark up that same bottle is a different story. I guess I fall somewhere below that 81st percentile that I referred to earlier. Oh well, that's life... uh - chest luh vy... ;)

                                                                          Chin Chin,
                                                                          Bula

                                                                    2. re: bulavinaka
                                                                      z
                                                                      zin1953 Jul 20, 2008 09:27 AM

                                                                      OK, let me rephrase . . . I have no idea where you live, but judging from the number of posts on the LA board, I'll guess you live somewhere in the greater Los Angeles mondo-metropolitan area.

                                                                      So, whenever I eat at Campanille, Luques, Hatfield's, Valentino's, Michael's, Melisse, Wilson (the list goes on) . . . "a majority of tables have a bottle of wine on them; indeed, a sizable majority, at that. Some parties of four-to-eight people may even go through 2-3 bottles of wine during dinner."

                                                                      Cheers,
                                                                      Jason

                                                                    3. re: zin1953
                                                                      b
                                                                      bulavinaka Jul 20, 2008 08:26 AM

                                                                      Zin, I feel your enjoyment of wine has just about everything to do with this issue... No one in their right mind is willing to pay for anything if their is no perceived value in it...

                                                                      1. re: bulavinaka
                                                                        z
                                                                        zin1953 Jul 20, 2008 09:16 AM

                                                                        >>> I feel your enjoyment of wine has just about everything to do with this issue... <<<

                                                                        It doesn't. My 35 years of being in the wine trade does, but I'm not about to convince you of the difference.

                                                                        >>> No one in their right mind is willing to pay for anything if their is no perceived value in it... <<<

                                                                        Which is why I won't pay $10 for a martini when I can make one that is as good or better at home . . .

                                                                        Which is why I won't pay $40 for a steak when I can make one that is as good or better at home . . .

                                                                        * * * OK, to be fair: "won't" (as in "never") is an exaggeration; "rarely" is more accurate. * * *

                                                                        Which is why I DO go to restaurants which either do a better job than my wife and I can do at home, or prepare dishes we cannot do at home . . .

                                                                        Which is why I DO buy wine off wine lists when they are NOT overpriced, and don't when they are . . .

                                                                        And so on . . .

                                                                        Cheers,
                                                                        Jason

                                                                        1. re: zin1953
                                                                          b
                                                                          bulavinaka Jul 21, 2008 12:22 PM

                                                                          You're right - I'm not convinced. Being in this type of industry for 35 years I feel flows directly from your passion for this subject - if it didn't, masochism is the buzzword! You state your priorities, and that is proof enough to me that you do understand the concept of value, but seem to refute what others see as their concept of value. And I have my priorities like you and anyone else. DIFFERENT, yes, but I know my priorities better than anyone else as you do yours.

                                                                          As a general rule, I refuse to pay what I consider ransom to any restaurant that feels they can hold a bottle hostage, and is only willing to relinquish it for some amount that I personally feel is out of line. If I had the depth of knowledge 1/10 that of yours, I could probably make far better decisions on whether they are holding a bottle hostage, or are actually giving that bottle a lot of TLC and that the price is fair. Unfortunately, I can only go off of what little I may know and coupling that with relatively inconsistant experiences with sommeliers (maybe my bad for not choosing the right restos or properly conveying my desires but that's a whole different subject), it's just a lot better of a decision for ME personally to order by the glass. The amount of information relating to wines that passes through your brain in one minute is probably more than I can ever hope to accumulate in the time that I'm willing to attribute to what I consider to be a growing curiosity. And I think maybe that is why some of the other posters and I seem to be at odds with some of your views. Pardon my assertions but I do sense that your depth of knowledge and emersion into this area may mute your to understanding that most have a balance of priorities and values on this general subject that are influenced by factors that are far different than the ones that influence yours. And again, based on the level of restos that you visit - I'm guessing on a very regular basis - what is average wining and dining to you is definitely not the same for me. In fact, from this perspective, I N V U! :)

                                                                          1. re: bulavinaka
                                                                            z
                                                                            zin1953 Jul 21, 2008 01:48 PM

                                                                            I have no problem with what people profess to see (or not see) as "value." But I would like to UNDERSTAND how one gets to that point.

                                                                            I readily admit, to continue with this example, that my knowledge of what Beeferater Gin costs affects my perception of value in a restaurant or bar. But I deliberately used the retail price (rather than wholesale), so that my knowledge is identical to every other patron of a restaurant or bar.

                                                                            I deliberately have not used (e.g.) the cost of beef, because I have no idea what a restaurant pays for their meats.

                                                                            The markups on bar drinks across the board is substantially higher than restaurant wine lists. I find that far more offensive to my wallet than the majority of the markups I find on wine lists. But then again, I find most of the wines in the marketplace today to be outrageous at RETAIL! Perhaps that's why a) I may have a slight ability to find value on most wine lists, and b) I find wine list prices to be less offensive, but only by degree. In other words, a wine list price is merely the insult that's added to the injury that the retail price causes in the first place . . .

                                                                            Let me hasten to add there are wine lists where I find the pricing to be not merely absurd or outrageous, but flat-out obscene! This is why I often bring my own wine to the restaurant. I willingly pay corkage (see the next paragraph), and I willingly share with the sommelier/waiter and the chef, if they are interested.

                                                                            Indeed, corkage is an issue I have much more trouble with than outrageously priced wines. After all, you don't have to pay the outrageous price if you can bring in your own wine. But corkage has increased from the $5-8 range to as much as $35-50, even $75! THAT is obscene, and totally without reason.

                                                                            The restaurant has the right to a profit. I do not deny that, nor would I. But they also have no idea what wine I may bring in, or -- if denied the ability to BYO, what wine I might buy. My theory has long been that corkage should be a reasonable flat rate OR, at the most, should be equivalent to the profit made on the least expensive bottle. So if Cache Phloe Cellars ________ is on the wine list for $32, and the restaurant realizes a $20 profit on that sale, corkage should be no more than $20.

                                                                            I have no problem with that. It makes sense. To me.

                                                                            But I don't understand where restaurants restrict corkage to, say, two bottles per party. A party of two, a party of four, of twelve -- makes no difference, you can bring in two bottles and no more. That's ludicrous!

                                                                            >>> Pardon my assertions but I do sense that your depth of knowledge and emersion into this area may mute your to understanding that most have a balance of priorities and values on this general subject that are influenced by factors that are far different than the ones that influence yours. <<<

                                                                            There's nothing to pardon, if I actually thought that was true. But your sentence above, along with your assertion that "based on the level of restos that you visit - I'm guessing on a very regular basis" -- well, let's just say it feels as though you have me spending 3-4 nights a week at places like the French Laundry, and buying bottles of wine on a regular basis that are $100 and more!

                                                                            Nothing is farther from the truth.

                                                                            As I always said about my time in the wine trade, "You don't make a lot of money, but you eat and drink really well." But I'm not in the wine trade anymore. I retired from that, and I now work at a job that pays me less than the 2006 US household median income level. In other words, I am far from wealthy, and I need to watch what I spend in order to make ends meet.

                                                                            I don't deny it may be easier for me to walk into a wine shop and find a great bottle at $15 than it might be for you. But as I've said elsewhere in this thread, most of my [retail] purcahses are in the $15-25 range, going on up to $40 or so. I rarely spend $100 on a wine at retail, and rarely more than $120 in a restaurant -- and that's usually Champagne . . .

                                                                            I used to say that there are plenty of great $50+ bottles, but what the world needs is a great $5 bottle of wine. OK, with inflation and all, I now generally say that there are plenty of great $100+ bottles, but what the world needs is a great $10-15 bottle of wine . . .

                                                                            Where are we different?

                                                                            Cheers,
                                                                            Jason

                                                                            1. re: zin1953
                                                                              b
                                                                              bulavinaka Jul 21, 2008 05:53 PM

                                                                              Understood, sir... eye-to-eye now... Currency conversion is a beach... :)

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