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

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

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  1. 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. 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

        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

          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

            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

              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

                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

                  >>> 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

                    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

                      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

                        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

                          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

                  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

                    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

                      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

                        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

                    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. 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

                    "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. 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

                      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

                        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

                        I think that's a fair statement.

                        1. 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

                            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

                              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.