I’ve noticed recently, in many forums and wine websites, that there seems to be a lot of animosity over the prices charged for wine in restaurants. As a former restaurant owner, I am familiar with the challenges of mark-up pricing. There is no simple answer to what constitutes a fair mark-up for a bottle of wine. I believe the issue is two-fold.
On the customer side, I can understand why someone might be upset if they paid $50 for a bottle of wine at Luigi’s Italian Connection, only to see the same bottle in the local wine store the next day for $20. However, if you think about it, it’s not exactly the same bottle. Wine stores don’t have the overhead that restaurants do, and often, they temporarily mark down certain wines to near wholesale prices just to attract customers. I am reminded of one local wine store I frequented, which advertised “Siegle’s Wine of the Week,” featuring a different bottle each week to bring in business. A wine store can sell at a much lower profit margin than a restaurant. In a restaurant, you’re not just paying for the wine and food; you’re also paying for service, décor, and the overall atmosphere.
The Costs Restaurants Face
On the restaurant side, there are exorbitant licensing fees, high insurance costs, wages for skilled staff, the expertise of a sommelier, staff training, compliance with local ordinances and laws, and a host of other challenges. Restaurants need to mark up their prices significantly to cover these costs. You’re paying for their expertise as much as anything else. The wine has to be properly cared for, stored, opened correctly, and poured in appropriate stemware (which is not cheap). Restaurants also have to replace broken stemware, maintain equipment, and handle a million other tasks. They must make money where they can, and wine is a good place to start. After all, there is little in a restaurant that you can’t buy cheaper at the store and take home.
Another problem is defining what is “fair.” I doubt you’d get many people to agree on a single definition. Different restaurants have varying operating costs, but they still need to stay within a similar range of prices to remain competitive. Much of this depends on the quality of the restaurant. For example, I would certainly expect to pay more at the Château d’Roberè than at Billy Bob’s Barbecue Barn. Of course, I’d also expect commensurate service and selections. If someone tried to charge me $50 for a bottle of Boone’s Farm at Jenny’s Diner, I would walk out. I think a fair compromise would be somewhere in the neighborhood of a 250% mark-up from wholesale. This would mean a $20 bottle (roughly $10 wholesale) would sell for around $20–$30. I can live with that, and perhaps the restaurant can make enough to ensure their employees don’t have to rely on government assistance. Of course, this is just my opinion.
As mentioned earlier, in a nice restaurant, the host takes you to your table, which is selected in a way that ensures fairness for all the waitstaff. A waiter or waitress then 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 waiter or waitress serves it to you, making sure you’re happy and attending to all of your needs. A skilled sommelier, with extensive knowledge of wine, helps you select the best wine for your meal, preferences, and price point. As a team, they all work together to provide you with the best dining experience. And the work doesn’t stop when you leave. Someone has to bus the table, wash the dishes, and prepare the restaurant for the next day’s challenges. All of these people need to be paid, and if they do their jobs well, they are worth every penny and more. This is what you’re paying for in a good restaurant. Indeed, some restaurants are so prestigious that they could likely get away with charging $20 for a glass of water, simply for the prestige of dining there. Everything is relative. Like most things, you usually get what you pay for.
In an average restaurant, I would expect to pay a 200–250% mark-up. In an outstanding Three-Star restaurant or higher, I wouldn’t be surprised by a 300%+ mark-up, and I would gladly pay it for the privilege. But that’s just me—I don’t go to those places to save money. Most restaurants charge whatever their market will bear. My suggestion? If you have a problem with a restaurant’s prices, either find a different place 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 The Andy Griffith Show reruns on the Nostalgia TV Network. You’ll save money, and I don’t mean that derogatorily. Many times, my idea of a wild night is sitting at home with some beer and popcorn, watching old black-and-white movies on TV. There’s a time and place for everything. If you’re going out to dine, then dine well—and remember, you’re worth it. Otherwise, grab a burger and a movie somewhere. You can’t have it both ways.
