Do Restaurants Overcharge for Wine?

I was horrified.  A lunch with friends on a nice sunny day in Pretoria was ruined for me by the mark-ups on the wine.   One reliable red from Stellenbosch, the Warwick First Lady, was selling for around R220 a bottle, and R80 for a glass.  No indication how much air would accompany the wine in the glass. Now this wine can be purchased retail for around R60-R70 a bottle, depending on the retail outlet and their promotions at the time, and I am sure a restaurant would be offered a cheaper wholesale price.  I am afraid that the mark-up is just far too high – a mark-up in the order of four-fold?  That is unacceptable, and I will not be returning to that restaurant.  But am I just being mean and cork-Scroogish?  Should we happily pay so much for restaurant wines?  And what about us bringing our own bottle, and paying a corkage fee?   Here are a few comments from a few of our experts:

Food and Wine Guru Michael Olivier:

As a former restaurateur whose wine mark-up was 70%, I think 4-times is a bit rough.  There are fridges, glasses, openers and staff which need to be paid for, of course.  If guests brought their own wine and it was either an overseas wine or a particularly old vintage I did not charge corkage.  But if people bring their own wine ,the restaurateurs lose out on income.  So yes – charge corkage, perhaps equivalent to the profit on your lowest-priced bottle.   I had a guest bring a cake once, asking for it to be served for dessert!    I did not charge cake-age.

Out-to-Lunch Columnist David Bullard:

The interesting thing about moving down here to the winelands is the price of good wine in a restaurant. For example, I usually pay around R85 for an estate Sauvignon Blanc, and maybe as much as R100 for a very quaffable estate red. That’s all thanks to healthy competition and a clientele that baulks at paying more. I shudder every time I have to pay for a wine in a restaurant in Jo’burg.  To me it’s rather like the argument over the price of motor vehicles. The price is what the market will bear and, while I would no longer pay a 400% mark up on a wine (because I now know better) I am sure many people with expense accounts will.  A fair corkage charge is R50-75, depending on the restaurant. That is a more than generous fee for the hire of glasses. If I take a rare wine to a restaurant (one they do not stock) I expect to pay no corkage – in exchange for a tasting glass for the sommelier. That has always worked if I check it out while making the booking. Since my ratio of booze spend to food spend is well known to be around 60:40, most restaurants that know me are quite happy to oblige. If they don’t, I simply don’t return there or recommend it. Like everything in life, it’s a matter of give and take – and while a restaurateur is quite entitled to make a profit from what I drink, I think I am quite entitled to object when I get the feeling I am being…..  (The end of this sentence has been removed due to its graphic content.  Ed.)

Mario Pretorius from Telemasters:

The mark-up on wine of 400% follows the general restaurant rule that the food cost should be around 25% of the price of the dish.  Is this a fair mark-up? The difference is that food is altered from its raw state by expert chefs to something you probably couldn’t repeat at home; hence the culinary experience that resonates so well. To enhance the ambience, some libation is welcome, but at most some cooling and the use of a corkscrew is added.  It is a galling misuse of good faith at the 4x level, and few restaurateurs offer good value in the drinks section.  The good news is that the bile spitting will bring out the miser in most of us and we will drive home more sober. Alternatively, one should choose the most economical wine, up from cheap but not expensive. It has been exhaustively reported that few experts can distinguish good wines from ghastly, expensive, and supposedly superior, ones.   The alternative is obvious: BYOB. Since corkage is usually a fixed amount, the best strategy is to bring the most expensive or best bottle in your cellar and grin at your victory. Just don’t overdo it; jail time as a drunken driver will be phyrric.

Branding Guru Jeremy Sampson:

I think a mark-up x4 is verging on the obscene. And a glass at more than the (retail) price of a bottle is just stupid. After all, what value is being added?  There are times when I am happy to take my own bottle and pay corkage.  In brand terms we all need to be able to trust who we are dealing with.  Once we discover that we are being taken advantage of we should vote with our feet and then use the most potent form of marketing – word of mouth – to ensure they are driven out of business

 Duane Newman from Cova Advisory:  

Pricing of wine in a restaurant is an interesting challenge to deal with. I have found expensive wine has much higher mark ups – 3 to 4 times the local liquor store. It is defendable, as the restaurants whhich carry the expensive wines normally have an extensive selection – and the restaurant has to pay up-front and carry the stock. I also believe it is a price point issue. Some people buy wines in a restaurant based on price, believing the more expensive the wine, the better quality they are getting.  This is not always true, of course.  It therefore comes down to knowledge of what you are buying. The more you know, the better equipped you will be to select value for money.  Personally, I buy wines based on what my wife and I like, and based on the occasion.  We really enjoy Meerlust Rubicon or Merlot which can go for R700 in a high-end restaurant, but I can buy the same wine for R200 or below at a shop. But I would be willing to pay that for the special occasion.

Conclusion:

Dining out should be a pleasure.   Dining out and being ripped off for wine is not.  Charge too much for your wine and I will charge for the door.  And I will not be back. 

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