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November 8, 2007

Pricing of wine in restaurants

WinePrices

 

I was interested in Darlene's observation (actually her husband's) about wine pricing, that he thought Baltimore restaurants marked up bottles more than other places. He travels a lot, she said, so he has a chance to observe.

The whole topic of wine pricing interests me, especially after spending time in Italy where it was cheaper than water (sigh). I expect...

 

(Monica Lopossay/Sun Photographer)

...the markup to be about 100 percent in a restaurant -- not that I'm happy about it -- although I notice plenty of places offer half-price bottles one day of the week, or otherwise make drinking wine when you eat out more affordable. Sometimes new restaurant owners who wanted to stress wine have had deals like $5 over retail price, but those tend to disappear over time.

The markup that most outrages me is wine by the glass.

I asked my wine guru, Michael Dresser, what he thought of Darlene's husband's observation, and here's what he had to say:

That's hard to verify. There is a natural tendency to think that oneself is being charged too much and that everybody else is getting a break. However, it would not surprise me if certain markets where wine is part of the culture -- say California -- may have lower markups. I would say that a restaurateur who has previously worked in several other U.S. cities might have  more  of an insight.

If there are any of those restaurateurs out there reading this blog, I hope you'll post a comment below. (Or frequent travelers who love wine, for that matter.)

 

Posted by Elizabeth Large at 11:11 AM | | Comments (21)
Categories: Wine and Spirits
        

Comments

the basic economics of this business dictates pricing. higher priced wholesale wines will have a conservative mark up, usually 1.5 to 200%. lesser priced wholesale wines will have a general mark up of appx. 300%. the disparity is due to risk aversion of maintaining cost of equity(stored expensive wine) and the volume/tempo of lesser priced wine. as far as wines by the glass, labor as well as maintenance is factored into the final price. (opened bottle & bartender). this translates into a premium in the mark up pattern.

Typically a restuarant marks up wine anywhere from 250% to 300%. It's actually disgusting when you think about it. When you order wine by the glass, you just paid about a dollar more for than the entire bottle cost the house, just in case they couldn't sell the remaining 3 glasses.It's greed, I would love to open a wine bar and just make $5-10 per bottle, regardless of price, I believe quantity over quality of profit would be well worth it.

Holy Cow ! where do they mark up wine ONLY 100% - Tell me and I'm there. Just an example, How about an 'ok' Smoking Loon Merlot $6.99 at your local and $22 at Liberatores - do the math. 200% seems to be what I've seen.

My husband and I love wine and especially enjoy having wine with a meal. But, it has been several years since we have ordered a bottle with a restaurant dinner because we decided that the mark-up was just beyond the pale. And, wine by the glass prices could be characterized as felonious. A bottle of wine costing 20 dollars retail being sold at 12 dollars a glass is just outrageous.

I really hope that some restaurant owners will address this issue here on the Food Blog of All Food Blogs!

the market will continue to dictate what it will bear. if a wine/bar/restaurant is to open offering only a 100% mark-up for bottle and or glass and is to capture a significant % of the market, then logic dictates that other dining/wine bar establishments will take notice. then again, what business person make such a move to compromise his/her margins in such a high risk industry????
a caveat to the thread. europeans have a lower margin b/c they consume more volume per person then americans. it's simple economics in pricing....

I'd like to know people's recommendations for solo fine dining in the Baltimore area. I'm not talking about Olive Garden, Macaroni Grill, etc. I'd like to know which fine dining places treat singles well and not as an after thought.

Go to the Wine Market in Fed Hill. They put a nine dollar corkage fee on their wines above the retail cost.

This is why I like dining in York Co PA which is close to my home in Parkton. Most of the restaurants did not have a liquor license so you can bring your own bottle. It is great.

I recently learned that many restaurants that have liquor licenses will still allow customers to bring their own bottle and then charge a corkage fee. For example, a friend from NYC came to visit and toted along two bottles of Caymus for our dinner out at Timothy Dean. We got to drink the wine we wanted without having to rely on the restaurant's list. Plus, were able to drink it at a more affordable price.

Also, Iron Bridge in Columbia is both a restaurant and wine shop. You can order any of the 30+ glasses off the list - not sure how they compare to wines by the glass prices in the area - or, pay retail for the bottle along with a corkage fee at your table making the bottle much more affordable.

Lastly, I was in Philly for a weekend getaway in May and the BYOB restaurant phenomenon seems to have taken over the city. So much so that our hotel room had a walking map of the BYOB restaurants in the area and one of the local magazines had a BYOB restaurant guide. This could be a trend with some legs that will hopefully move into the Bmore area. Maybe it's a sign that people are fed up with inflated restaurant wine prices?

Well, that stimulated some discussion!
Years ago my husband invented the "Kendall Jackson rule." Some restaurants charged double what one might pay in the liquor store, but others tripled or even quadrupled that. Now that wine lists are more varied it's harder to apply that rule, but the impression of higher mark-ups here remains.

Someone said about Europeans consuming more wine than Americans should look at this article: http://news.bbc.co.uk/2/hi/europe/5107400.stm

They are actually producing too much and an increasing number of them are coming from the New World. That's probably a better reason why wine is cheaper in Europe.

The Wine Market and Helen's Garden have good selections of wine by the glass and great "Happy Hour" prices. Bottle prices are also reasonable. That said, be wary of wines by the glass, especially "featured" wines, that cost $12.00 and up. Molly Dooker shiraz is good, but not $12.00 good and you do need to ask, " How much?" I think there is a general lack of the table wine concept in this country. In Europe you can get decent table wines in eateries and they do not cause sticker shock. In the U.S. I think this cash cow is here to stay. Another pet peeve of ours is the array of stemware that wines are served in. Filling a small glass to the rim doesn't work. And having to ask for a red wine glass for red wine...... Our rule is when in doubt order a martini.

Way to go with the martini and none of that new designer martini stuff; give me a dry gin martini with a couple of olives and forget the wine. Heck just thinking about this wine issue coupled with creeping tipping and we are all going to be taking out mortgages to go out to dinner.

I totally agree with Dave's comments about stemware. It's frusturating to order a decent bottle and then have it served in the inappropriate stemware or have a glass overpoured. I also hate when red wine is served too warm. There are a few repeat offenders.

I'm hoping that the concept of keeping wine prices affordable so every table in the restaurant has a bottle wine on it will catch on - similar to the European attitude towards wine consumption. Dare to dream!

Dave, how much is the gin in your martini marked up?

Wait a minute. Based on the comments that have come in, you may have hit on a terrific Top Ten Tuesday topic. What are the ten restaurants in Baltimore and environs that give diners the best deal on wine, by the bottle or by the glass? As someone who drinks wine with almost every meal (okay, skip breakfast) -- but hates to overpay for vin ordinaire -- I'd be grateful for any suggestions.

Sounds good to me. More suggestions welcome.

B in Bolton Hil has a great Tues. night 1/2 price bottles special

We have to realize that everything is marked up. How much does that $2.95 soda cost the house or $2.50 bottled water or even the $12.95 pasta dish? It's just that wine is A. more expensive than these items so markups will seem so too and B. it is easy to find the exact price-- anyone can go to a liquor store and see the actual price at which they could buy the wine. Could you go to the supermarket and find out how much the ingredients were for your meal?

When you buy a bottle of wine at a restaurant you are not only buying the wine but:
* someone to open, serve it, take it away, clean your glasses, etc.
* the space you are sitting in to enjoy it
* a liquor license for the restaurant’s permission to serve it to you
* someone to buy and store the wine
* all the other restaurant overhead

I have found many of my favorite wines that I never would have tried by taking suggestions of the expert bartenders and servers at restaurants. Many have even let me and my wife sample wines to select our bottle. I consider this and all of the other services a premium which I am happy to pay.

And No I don't work or have never worked at a restaurant or bar.

This is a little off point, but relevant to the discussion about wine pricing: the role of the wholesalers. I like a Virginia pinot grigio. It sold at the vinyard for $14 a bottle last time I was there. Montgomery County liquor stores sell it for about $12.50 -- a buck less with the case discount. Yet my Baltimore retailer says that is less than his wholesale price! The Montgomery county stores have never been accused of discount pricing -- quite the contrary.

"This is why I like dining in York Co PA which is close to my home in Parkton. Most of the restaurants did not have a liquor license so you can bring your own bottle. It is great."

I live in this area and would love to know the names of these BYOB restaurants.

How about the Top Ten BYOB restaruants in the Baltimore area?

I went to Iron Bridge this weekend - presently, the corkage fee is $10.

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About this blog
Richard Gorelick was appointed The Baltimore Sun's restaurant critic in September 2010. Before joining the paper staff fulltime, he contributed freelance criticism and features articles about food to area and regional publications. Along the way, he dispatched for short-distance trucking companies, shilled for cultural non-profits, and assisted in cognitive neurology research – never the subject, always the control.

He takes restaurants seriously but not himself, and his favorite restaurant is the one you love, too.
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