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Why is wine by the glass so much more expensive in the US v. Europe?

Chinon00 Jun 25, 2009 05:29 PM

As we all know it can be difficult these days finding a glass of wine for under $8 in the US. But why is it that in Europe wine by the glass is so much more affordable?

Thanks

  1. Caralien Jun 25, 2009 05:48 PM

    Wine can be had for cheaper prices in the US, but that usually plunk at the by the glass liquor stores (I've only seen 1--with a handwritten sign in the window).

    I wish I could honestly say that it's distribution costs, but it's probably more on the lines of distributor costs (with the antiquated groups for some to have X and others to have Y, hence you may or may not be able to get what you would actually like except at an excessive cost if shipped directly from the winery). Even the rent is cheaper here than in Europe.

    California wines are often more expensive than imported ones. The cost of a bottle of Ruinart here is the same as in France (a friend who works for LVMH in Madrid had to stash a case on a truck to get the wholesale price as gift to give to her parents in Paris)

    I empathise.

    1. z
      zin1953 Jun 25, 2009 07:17 PM

      Bar markup.

      Restaurants typically wines by-the-glass using a formula akin to bar markup (think Martinis) than a formula that says "wine list price divided by x number of glasses equals _______."

      15 Replies
      1. re: zin1953
        Caralien Jun 25, 2009 07:37 PM

        Zin--if the US bars and the EU bars were charged the same amount for a bottle, say $40 US.

        40/5 glasses = $8
        Standard markup, minimally 100%
        1 bottle profit = $40
        cost of rent in EU: higher
        cost of wages in EU: higher (US has the sliding scale with something ridiculous amounting to $2/hour + whatever the bar/restaurant decides is adequate if tips are included or not)
        cost of benefits to staff in EU: higher (almost non-existent in US)

        That said, most US bars serve a lot more than 150ml/glass, particularly for red wines; with double pours, the bottle profit would be $20.

        I have no idea whether it's cheaper to get a liquor license in the EU countries than in many US states, but do know that storage costs in the US would also be cheaper than in the EU due to cost of electricity being so highly subsidised.

        1. re: Caralien
          z
          zin1953 Jun 26, 2009 12:29 PM

          When I ran a wine bar, we sold our bottles off the wine list for $5 over retail. Thus, if a bottle cost @ wholesale $20, that would translate (using a traditional markup) to a $30 retail. It would be $35 on our list, returning to the restaurant $15 in gross profit.

          We poured six 4-oz. glasses per bottle. Let's presume for a moment that sales tax is 8.5%. So that $35 bottle would be $37.98 including sales tax. Round that up to the nearest nickel -- $38 -- and divide by five. So each glass would cost $7.60, or $45.60. We would make $25.60 gross profit if we poured that bottle by-the-glass.

          If the bottle cost @ wholesale $50, that would be $75 retail and $80 on our list. By the glass, it would be $17.40, or $104.40. The rsulting gross profit would be $35 and $54.40, respectively.

          Now, MOST restaurants mark up on a percentage basis, rather than a flat dollar formula. Frequently wine lists charge 3x wholesale, or even 3x RETAIL! This would result in a restaurant charging between $60-90 for the first bottle, with a by-the-glass price of somewhere between $15 and $20+ each. The second? $150-$225 on the wine . . . .

          Jason

          1. re: zin1953
            Caralien Jun 26, 2009 12:37 PM

            Unfortunately, most bars and restaurants are taking $8-12 bottles (retail) and charging $8/glass.

            It would be nice if there were more wine bars like the one you ran!

            1. re: zin1953
              Midlife Jun 26, 2009 01:01 PM

              Jason,

              I'm finding the best deals in wine pours (outside of wineries) seem to be at smaller retail shops with wine tasting. If you can trust the shop's selections, it's not unusual to find five or six decent 2-3oz pours (total of 10 to 18 oz.) for $15-$20. They, especially the ones with decent small-plate food menus, can be a real find.

              1. re: zin1953
                alanbarnes Jun 26, 2009 01:02 PM

                Isn't it typical for an American restaurant to price a glass of wine at the wholesale cost of the bottle? If so, the wines you described would go for $20 and $50 per glass.

                Maybe the pricing structure at the place you ran was a little more "European." If so, there's a plausible answer to the OP's question...

                1. re: alanbarnes
                  z
                  zin1953 Jun 27, 2009 12:40 PM

                  >>> Isn't it typical for an American restaurant to price a glass of wine at the wholesale cost of the bottle? <<<

                  Typical? No. But your "typical" restaurant in the States is not Morton's Steakhouse, Per Se, or Gary Danko's . . . this isn't to say that there are not high(er)-end restaurants that cover their cost with the price of the first glass -- there certainly are -- but . . . .

                  1. re: zin1953
                    alanbarnes Jun 27, 2009 01:04 PM

                    It's been years since I worked in the restaurant biz, but it certainly wasn't at Per Se or Gary Danko's, and the by-the-glass cost was always set at the wholesale cost of the bottle. I have a buddy who owns a mid-range steakhouse; same deal. Info found here on Chowhound is also consistent with this. (See http://www.chow.com/stories/11534 ["At a typical cost percentage of 20 percent ... a restaurant pays for the whole bottle when one customer buys a glass"]; http://chowhound.chow.com/topics/289577 ["The traditional formula is that the restaurant attempts to make back their investment on the first glass"]; http://chowhound.chow.com/topics/166297 [discussing "the accepted norms for a by-the-glass markup (wholesale price of bottle covered by 1st glass)"].

                    There's always the question of the size of a pour. It can be anywhere from four to six ounces, so cost percentages can range from 16% to 25%. But in my experience restaurants with higher percentages than that are by far the exception rather than the rule.

                    1. re: alanbarnes
                      z
                      zin1953 Jun 27, 2009 08:34 PM

                      I'm not sure where you think we are disagreeing, Alan . . .

                      YES, some restaurants DO charge at or close to the wholesale-cost-per-bottle for their by-the-glass program. I don't see any disagreement there.

                      BTW, some don't. Certainly none of those that I worked at, nor those I regularly dine at. In other words, while lots DO, lots DON'T . . .

                      YES, restaurants charge lots of money for wines by the glass. I don't see any disagreement there, either.

                      1. re: zin1953
                        alanbarnes Jun 27, 2009 09:51 PM

                        No disagreement; I'm just trying to get info from somebody in the business (you) who knows more than I do about how these things work. Sorry if it came across as confrontational; it was supposed to be inquisitive.

                        I have been told, and thus assume, that the typical model in the US is to charge the wholesale cost of the bottle for the first glass. I assume that there are other models out there; you have described one that was used at your wine bar, and I know other places that deviate from what I assume is the norm. And although I don't begrudge restaurants their typical profits, I love to find a place where the owners want to provide their customers with great wine at economical prices instead of testing how much markup the market will bear.

                        But if the typical US model is as I understand it, and if the European model is somehow different, then that might be an answer to the OP's question. Given that my knowledge of the US model is limited, and that I know absolutely nothing about the European model, all I'm suggesting is a possibility. If it makes sense, I'll happily claim full credit. But meanwhile I'm just trying to figure things out.

                        1. re: alanbarnes
                          z
                          zin1953 Jun 28, 2009 09:51 AM

                          There are no hard and fast rules, no legal standards. So everyone is free to charge "what the market will bear."

                          Concrete example: Oliveto Café & Restaurant is a highly regarded, not inexpensive restaurant in Oakland, CA. The website is http://www.oliveto.com/ At a recent dinner there, they were offering the 2007 Produttori del Barbaresco Nebbiolo delle Langhe for $12 for a four-ounce glass. Suggested retail for this wine in California is $20 (it's less expensive on the East Coast), meaning the wholesale price is $13.33. The restaurant also sold this wine for $48 per bottle on the list, so they are taking the bottle price and dividing by FOUR, but pouring six glasses (versus my formula above of dividing by FIVE). Thus, the restaurant takes in a total of $48 if they sell the bottle, $60 if they sell the entire bottle by-the-glass. Again, their cost is $13.33/btl.

                          Of course, my formula would have been $25 on the wine list, and $5.45 for a glass, but that was a while ago . . .

                          The American approach to wines by the glass is to bring it in line, as much as possible, with "bar markup." In other words, even if you paid RETAIL for a 1.0L bottle of Bombay Saphire (and remember the restaurant pays wholesale!), you are paying slightly over 88¢ per ounce . . . how much is that Martini? OK, I admit the percentage markup on by-the-glass isn't THAT outrageous, but it can get pretty ridiculous.

                          In France, at least, I have found the markups to be far more reasonable . . .

                          Cheers,
                          Jason

                2. re: zin1953
                  s
                  Shooley Jun 28, 2009 06:32 AM

                  Geez, 4-oz. pours? That's barely enough to whet one's whistle, or whatever. But that's a different issue. Sometimes wine bars use the wholesale price ($8.00, for example) to set the per-glass charge; that way if they open a bottle and only end up serving one glass from it, they've at least made their cost.

                  1. re: Shooley
                    PolarBear Jun 28, 2009 07:35 AM

                    One that caught me eye, in SF iirc so Jason may know, was their offer to open any bottle if you purchased two glasses.

                    1. re: Shooley
                      z
                      zin1953 Jun 28, 2009 09:28 AM

                      Restaurants will pour anywhere from 4-6 ounces of table wine as a "glass."

                      DANGER! DANGER! Warning Will Robinson -- Generalizations Ahead!

                      While there are exceptions to every generalization, it's been my experience that four-ounce pours are more common that six. This is especially true if a restaurant also offers "half-glasses," which are typically two ounces.

                      Again, many restaurants DO charge the wholesale bottle cost as their by-the-glass price. Many do not.

                      This will vary with not only the specific restaurant, but also by geography -- what is "common" or "typical" in, say, San Francisco isn't in, say, Las Vegas. What is the "norm" in, say, Los Angeles isn't the same in a small town like Santa Cruz, CA.

                      1. re: zin1953
                        s
                        Shooley Jun 29, 2009 06:34 AM

                        I made no claims or generalizations in my post: just stated that sometimes restaurants/wine bars pour more than 4 ounces. And, I'm also familiar with 3 oz. half-glass pours as "tastes." And, of course these practices vary by restaurant, duh.

                  2. re: Caralien
                    s
                    Sal Vanilla Jul 9, 2009 07:32 AM

                    A couple things. In Europe they measure their wine pour. In America they free pour.
                    In America (at least) restaurants charge more for the opportunity to have only one glass of wine from a bottle rather than having to purchase the whole bottle. For that opportunity there is a slight upcharge. Just like if you buy a single coke versus a sixpack (sorta)

                    Liquor licenses: The cost of them vary wildly state by state, county by county and by level. Like some are for beer and wine only (or lower level of alcohol), some allow you to also serve hard alcohol, some are only for package sales and then, ultimately, there is one that allows for all those options (at least those are the levels I know of). If you live in. Some states or counties have capped the amount of liquor licenses being sold so you have to buy them from another business. In those cases the license can be around $.5 million bucks.

                    I know more than you probably wanted to know. But people seem to think that restaurants are rip off artists, but a lot of the time there are hidden costs that have to be factored in when food and bevie costing.

                3. c
                  cimui Jun 25, 2009 08:08 PM

                  I don't know that wines by the glass are cheaper across the board in Europe. London and Dublin are about as expensive as NYC. It's slightly less in Bordeaux, but... well, it's Bordeaux, where wines are made.

                  Where do you have in mind? The economics of a glass of wine probably change a lot from country to country, within Europe.

                  In places where wines by the glass are less expensive than in the US, perhaps part of it is that a wider range of restaurants serve wine? In the US, especially outside of CA and NY, wines by the glass tend to be served at high-falutin' restaurants, not your local, inexpensive or even mid-range joint. In many parts of Europe, on the other hand, inexpensive bistros and cafes and even takeaway counters at train stations serve wines by the glass, in the same inexpensive price range as the food.

                  1 Reply
                  1. re: cimui
                    Chinon00 Jun 25, 2009 08:22 PM

                    "Where do you have in mind? The economics of a glass of wine probably change a lot from country to country, within Europe."

                    The usual suspects: France, Spain and Italy. I just don't recall "sticker shock" anywhere in these countries inparticular. At cafes the prices were 3-4-5 euro; not 8-10-13 euro (like here). I agree on the UK though.

                  2. c
                    crw77 Jun 25, 2009 08:58 PM

                    I think the difference is that Europe has a wine drinking culture, and the U.S. does not. In Europe wine has historically been considered food.

                    They expect you to drink wine with your meals so they price it so you can. In the U.S., it's a luxury extra.

                    4 Replies
                    1. re: crw77
                      Chinon00 Jun 25, 2009 09:20 PM

                      I think that you nailed it. Plus wine production in France for instance is much higher than it is here. I believe that more wine is produced in the Languedoc than in all of California. Although France exports more wine than America does (I think) we have nearly 4 times the population. Therefore they are awash in wine relative to us.

                      1. re: Chinon00
                        z
                        zin1953 Jun 26, 2009 12:46 PM

                        While I do believe there is merit to the idea that Europeans often treat wine with a meal as a necessity, whereas the US treats it as a luxury . . .

                        In 2006, the Languedoc-Roussillon region produced 15,750,000 hectolitres (416,070,000 gallons) of wine, which accounted for 34 per cent of total French output. California, in 2006, produced 21,089,654 hectolitres (557,129,712 gallons) of wine.

                        More important than production, however, is the figure for per capita consumption.

                        In 2005, French wine consumption was 55.85 liters per capita, or slighly less than 75 "regular" 750ml bottles per man, woman, and child.

                        In 2005, US wine consumption was 8.69 liters per capita, or less than 12 "regular" 750ml bottles per man, woman, and child.

                        Cheers,
                        Jason

                      2. re: crw77
                        s
                        Shooley Jun 28, 2009 06:34 AM

                        I think that's a fair statement.

                        1. re: crw77
                          v
                          Vlajos Jul 1, 2009 02:16 PM

                          Ding, ding. You are correct.

                        2. t
                          treb Jun 26, 2009 03:25 PM

                          I don't find that wine by the glass is that much more than the bottle price. One factor is waste, if there is a bottle, say of red, open and not sold that day it probably can not be sold the next day.

                          2 Replies
                          1. re: treb
                            Midlife Jun 26, 2009 03:50 PM

                            Well............... you don't necessarily want to know what some restaurants DON'T do on that front. I've been looking into it in depth for a project of mine and have found everything from very sophisticated, knowledgeable handling of wine overnight to 're-cork and put it on the back bar'.

                            Especially i your palate is sensitive, it's a good idea to ask when the bottle was opened and/or about the preservation practices used.

                            1. re: Midlife
                              t
                              treb Jun 27, 2009 06:39 AM

                              Yah good thought, that's one question I've learned to ask, when it was opened. Often times I like to eat at the bar and the bartenders really take good care of you. Red's really tend to breakdown quickly.

                          2. t
                            therealdoctorlew Jun 26, 2009 04:53 PM

                            In Europe, wine is a beverage. In the USA, it is a profit center.

                            1 Reply
                            1. re: therealdoctorlew
                              z
                              zin1953 Jun 27, 2009 12:41 PM

                              GOT IT! Ding! Ding! Ding! We have a winner . . . .

                            2. Gussie Finknottle Jun 27, 2009 12:46 PM

                              There are too many intangibles here:-

                              1) What is a 'glass ' of wine - what measure?
                              2) Where in Europe? Europe is a big place - a glass of Champagne in Reims (where it is the local wine )- is going to cost less than the same wine served in New York or London.
                              3) What exchange rate - they seesaw and what is a bargain this month can be the opposite next time

                              1. Bill Hunt Jun 29, 2009 08:26 PM

                                Please cite some good examples of this? We dine in Europe and the UK, and I have never found comperable wines to be that much different, once one gets past the exchange rate.

                                In my experience, it has been just the opposite.

                                Hunt

                                11 Replies
                                1. re: Bill Hunt
                                  j
                                  jonasblank Jun 30, 2009 01:36 PM

                                  To add to your point, just a thought, which may be wrong.... It seems to me that generally when you order wine in a wine-making country in Western Europe (let's just take Italy), you tend to be offered, and tend to order, domestic wines. I believe (and again, correct me if I'm wrong) that it's the case that U.S. wines, especially Napa/Sonoma/Willamette are among the most expensive to produce in the world, in particular due to the high cost of land in places like Napa Valley.

                                  So, if you're in Italy, your wine by the glass - say, a local Sangiovese - may be priced at 4 euros. But it hasn't been subject to import duty, and it was made nearby, and it was made at a facility that likely has been owned for generations, and thus, isn't under the crushing burden of enormous mortgages that are still being paid off. That 4 euro wine may well earn the proprietor the same amount of profit as a $12 glass of wine at a U.S. restaurant.

                                  In the U.S., your by-the-glass choices MUST by definition be either a) the "domestic" product (which, unless you are from California or a few other select places, had to travel a long way, with significant shipping costs, to get there even domestically), which is already more expensive than that Sangiovese was to begin with or b) an import, which might well be that same Sangiovese, which now costs more due to being imported.

                                  I'm just suggesting that to make the comparison accurately, one would have to compare apples to apples - is the SAME BOTTLE by the glass considerably more, on average, in the U.S. than in Europe? And if so, how much of that is the higher price of the bottle due to it being imported?

                                  Or is the issue just that in Western Europe, the domestic wine is already less expensive, on average, and thus, it's cheaper by the glass, too?

                                  I have little doubt, for instance, that a glass of Napa Cabernet is cheaper by the glass in California than it would be in London or Rome (if they were even serving it at all).

                                  1. re: jonasblank
                                    Bill Hunt Jun 30, 2009 07:11 PM

                                    For me, doing the math of the exchange rates would have to factor in, plus the averages of the meals, or other orders from one location vs the other, would have to be factored in.

                                    A general observation is that many restaurants in Europe/UK are more open to sharing wines with meals, than many in the US. In many spots, it's almost an afterthought, or considered as a profit center. At similar restaurants in Europe/UK, it would be considered herasy to NOT have wine with the meal.

                                    A lot of possible variables to consider.

                                    I'd just urge anyone going to London to not consider ordering a glass of Mondavi Woodbridge (not sure that those two names still appear on the bottles), as they are likely to be looking at paying 15£. Stick to the Euro-wines and you'll likely do better. Besides, would you order Woodbridge in the States?

                                    Hunt

                                  2. re: Bill Hunt
                                    WineAG Jul 8, 2009 07:43 AM

                                    Agree with you Bill. Having just returned from an extended stay in Italy and France I can honestly say that I was relieved to get back to the US from a price standpoint. Everything in Europe is about twice as expensive as in the US.

                                    1. re: WineAG
                                      v
                                      Vlajos Jul 8, 2009 07:51 AM

                                      I'm sure where you live, but prices in Europe to me are much less than the US. I was in Piedmont in May, bottles of good barbera's and dolcetto's were 10 to 15 euros. A bad wine in a US restaurant starts at $25.

                                      1. re: WineAG
                                        Chinon00 Jul 8, 2009 08:06 AM

                                        Where were you drinking in Europe and where do you drink at home? I was at our new "neighborhood" restaurant last week for a few glasses of wine. After my third glass the server asked me would I like another. I said to him "what's the damage so far?" After running over to the register and tapping a few keys he responds "Uh, $27.50". As we all know this kind of pricing is common these days. And I've never experienced anything like that happening at an equivalent place in France for example.

                                        1. re: Chinon00
                                          WineAG Jul 8, 2009 08:43 AM

                                          Visited Rome, Tuscany, Provence, Lyon, Paris... and live in Boston. Let's put it this way regarding pricing in Europe these days with the current exchange rate... When my 6 year old son would order Orangina or Fanta in a restaurant the cost was $8-10... $4.50 at McDonald's. Wines by the glass were typically 18-25 ea. at restaurants for basic stuff. I stuck to bottles, which were better quality and while expensive, easier to swallow than the wine by the glass offerings. To clean a shirt in a hotel.. ranged from $18 - $25.

                                          So, pricing/quality is MUCH better here at home... at a place like Troquet for example.

                                          Oh yeah, was also recently in London... don't get me started.

                                          1. re: WineAG
                                            Chinon00 Jul 8, 2009 10:36 AM

                                            First off soft drinks in Europe have always been higher than here. In my experience a glass of Coke will be higher than wine in many restaurants. And as for the "18-25 ea" price for glasses of wine, I'M NOT TELLING YOU THAT YOU DIDN'T SEE THAT, but with the exchange rate at 1.4 I find it hard to believe that across France glasses of wine are TYPICALLY 13-18 euro. At nicer places I'm sure that it is possible for certain wines. But as much as I like going over and having my share I'd be broke if that were typical.

                                            Thanks

                                            1. re: Chinon00
                                              v
                                              Vlajos Jul 8, 2009 01:28 PM

                                              Glasses of wine were like 5 euros where we were. We always stick to bottles though.

                                            2. re: WineAG
                                              v
                                              Vlajos Jul 8, 2009 01:27 PM

                                              Fanta's were like 2 euros in restaurants in Piedmont, Liguria and Milan. That's less than $3. Were you eating at hotels?

                                              1. re: WineAG
                                                m
                                                manku Jul 10, 2009 11:40 AM

                                                The only places where I've ever spent close to those prices are in outdoor cafes where for the price of one beverage, once can basically sit all day. Or at certain high end places like the bars in Piazza San Marco in Venice.

                                                I've rarely spent more than 25 for a BOTTLE of wine at most restaurants in Europe, including many Michelin starred places.

                                                Not sure where you are eating...i'd love to know!

                                              2. re: Chinon00
                                                v
                                                Vlajos Jul 8, 2009 01:31 PM

                                                agreed

                                          2. Caralien Jun 30, 2009 08:13 PM

                                            Zin is the only one to have mentioned taxes.

                                            Taxes in the US (in addition to the import costs) may also raise the price per bottle/glass/serving.

                                            On a side note, I'm still bummed that the east coast can't make a decent rose and will have to break the 50 mile zone for eating/drinking. There's a limit to everything, taste trumping all.

                                            2 Replies
                                            1. re: Caralien
                                              Chinon00 Jun 30, 2009 08:33 PM

                                              Which wineries within 50 miles are making decent (or better) wine in your opinion? None make rose; or they are all less than decent attempts?

                                              Thanks

                                              1. re: Chinon00
                                                Caralien Jun 30, 2009 08:48 PM

                                                None in 50 miles, or 800, have a decent rose (someone please prove me wrong). Many of the east coast vineyards have a rose, but they're on par with white zinfandel. Hopewell Valley had a good one last year, but sold out before I could buy some for the summer (the current batch is sweet; last autumn had a dry which was good).

                                                When I spoke to one of the winemakers from Alba, he mentioned that I was the only person to mention an interest in a dry rose during the East Coast Food & Wine Festival this past weekend, as most people seem to still have the idea that rose=sugary sweet. He really wants to try it, but hasn't found the support to make one that is dry.

                                            2. v
                                              Vlajos Jul 1, 2009 02:18 PM

                                              It's not just wine by the glass, but bottle prices as well.

                                              1. d
                                                duck833 Jul 8, 2009 08:06 AM

                                                When I was in the south of France I usually ordered whatever wine the locals were drinking around me. I believe they probably bought it in bulk and had a barrel in the backroom. All the local "Caves" had amazing prices if you brought your own jug in. The wine I had was very acceptable and cheaper than the bottled water my wife always ordered.

                                                1 Reply
                                                1. re: duck833
                                                  alanbarnes Jul 8, 2009 09:05 AM

                                                  Interesting point, and I think it ties in with one others have made.

                                                  The people who can afford to drink fine wine with every meal are a small minority both in the US and in Europe. So the biggest difference may be at places where fine wine isn't necessarily part of the picture.

                                                  At cheap and mid-level restaurants in the US, most people don't drink wine at all. It's much more common to see beer, soda, or tap water on the tables. On the other hand, there are places in the world where wine is considered an essential part of every meal. There, you're much more likely to see a modestly-priced meal accompanied by vin ordinaire.

                                                  So maybe the prices for a classified growth are in the same ballpark no matter what side of the Atlantic you're on. But in a place where there's a strong demand for "very acceptable" cheap wine to accompany an inexpensive meal, the wineries are going to make, and the restaurants are going to sell, acceptable wine for an relatively low price.

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