What Is A Fair Mark-Up On A Bottle Of Wine

I have noticed lately, in many forums and wine websites, that there seems to be a lot of animosity over prices charged for wine in restaurants. Of course, as a former restaurant owner, I am familiar with the problems of mark-up. There is no simple answer to what is a fair mark-up for a bottle of wine. I think the problem is two-fold.

On the customer-side, I can see why a person might be upset if they paid $50.00 for a bottle of wine at Luigi’s Italian Connection, and the next day see what seems to be same bottle of wine in the local wine store for $20.00. But if you think about it, it’s not really the same bottle. Wine stores don’t have anywhere near the overhead that a restaurant has. And many times, they will temporarily mark a particular bottle of wine down to almost wholesale prices just to get people to come into the store.  I am reminded of one local wine store where I lived advertising “Siegle’s Wine-Of-The-Week”. They had a different one each week, and it brought lots of business in. A wine store can sell at a much lower profit-margin than a restaurant. And in a restaurant, you are not just paying for the food and wine, but for the service, décor and atmosphere as well.

On the restaurant side, they have to contend with exorbitant licensing fees, high insurance, wages for good staff, the expertise of a skilled somalier, training, compliance with local ordinances and laws, and whole host of other issues. So restaurants have to have a high mark-up on most things. You are paying for their expertise as much as anything else. The wine has to be properly cared for, stored, opened correctly, be poured in the proper stemware (which is definitely not cheap), replace broken stemware, maintenance on equipment, and a million other things. They have to make money where they can, and wine is a good place to start. After all, there is little in a restaurant that you cannot get cheaper at the store and take it home.

Another problem is to come up with a definition of what ‘fair’ is. I doubt if you could get many people to agree on a single definition. Different restaurants have differing operating costs, but they still have to stay close to what others in the industry are charging, for the most part, in order to stay competitive. A lot would depend on the quality of the restaurant. I would certainly expect to pay more at the Chateau ď Roberè, than at Billy Bob’s Barbecue Barn. I would also expect commensurate service and selections. If someone tried to charge me $50.00 for a bottle of Boone’s Farm in Jenny’s Diner, I would walk out.  I think a good compromise would be somewhere in the neighborhood of 250% mark-up from wholesale. That would make a $20.00 (which would be around $10.00 wholesale) bottle of wine sell for between $20.00-$30.00. I can live with that, and maybe the restaurant can make enough so that their employees don’t have to live on government-assistance. Of course, this is just my opinion.

As I said before, in a nice restaurant, a host takes you to your table, which is selected in a manner designed to be fair to all the wait-staff, and a waiter or waitress takes your order, makes suggestions and answers any questions you may have (this requires knowledge and training), a professional kitchen staff prepares your meal, and your waitress/waiter brings it to your table, makes sure you’re happy, and attends to all of your dining needs. A skilled Somalier, who has an extensive knowledge of ‘all things wine’, and has cared lovingly for your future beverage, helps you select the best wine for your meal, preferences, and price-point.  As a team, they all work together to make your dining experience as nice as possible. And it doesn’t end after you leave. Someone has to bus the table, wash the dishes, and the entire restaurant has to be made ready for the next days challenges. All of these people have to be paid, and if they do good jobs, they are well worth their wages, and beyond. This is what you are paying for in a good restaurant. Indeed, there are restaurants with such lofty reputations that they could possibly get away with charging $20.00 for a glass of water, just for the prestige of being able to say you’ve dined there…, so everything is relative.  Like most things, you usually get what you pay for.

In an average restaurant, I would expect to pay anywhere from a 200-250% mark-up. In a really outstanding Three-Star and up restaurant, I wouldn’t be surprised at a 300%+ mark-up, I would pay it for the privilege, but that’s just me.  I don’t go to those kinds of places to save money. Most restaurants charge whatever their market will stand. My suggestion is that if you have a problem with a restaurants prices, then go somewhere else to eat, or buy that bottle you saw at the corner store, take it home and enjoy it with a bag of White Castle Burgers, while sitting on your couch watching Andy Griffith re-runs on the Nostalgia TV Network, happy in the knowledge that you have saved yourself some money. And I don’t mean this derogatorily in any way. Many times, my idea of a Wild Night, is sitting at home with some beer and popcorn, watching old black & white movies on the TV. There is a time and place for everything. If you are going out to dine…then dine, and dine well. You’re worth it. Otherwise, grab a burger and a movie somewhere.  You can’t have it both ways.



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