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Wine Lists - Restaurants and their mark-ups

Wine and Restaurants

From time to time I get upset in the column above when I find wine lists in restaurants that have huge and greedy mark-ups. It's worth considering just what makes a mark-up unacceptable. Let's start with the basics. Restaurants don't buy their wines like the rest of us in off-licenses or in supermarkets, they buy them from wholesalers.

From time to time I get upset in the column above when I find wine lists in restaurants that have huge and greedy mark-ups. It's worth considering just what makes a mark-up unacceptable. Let's start with the basics. Restaurants don't buy their wines like the rest of us in off-licenses or in supermarkets, they buy them from wholesalers. In theory, at least, that means they are buying at somewhere between 25% and 30% below retail. Once upon a time a restaurant would take that price, double it, add VAT and put that figure on the wine list. A crude rule of thumb, but it worked well enough.

If we take a wine that wholesales at €7, then it ought to be on the wine list for somewhere around €17. You could even accept €19.99, after all the restaurant is supplying you with a seat, warmth, a glass to drink it out of and a waiter to serve it to you. These are the obvious expenses, but they aren't the only ones. If you're being given elegant, thin-stemmed glasses to drink from, you should bear in mind that they make an average of ten trips to a table before they break, so you can add that cost to you wine bill as well. Most wholesalers have a no quibble replacement policy when it comes to corked wines, but not all do. Plus what do you do when a customer orders a Beaumes de Venise and then rejects it as being 'too sweet'? The restaurateur can't send it back to their wholesaler as 'corked' because it isn't. It becomes another cost to absorb. So the mark up has to cover all these costs. But where the rule of thumb doesn't work so well is when the wine becomes more expensive.

An above average wine, costing say €15 wholesale, can end up on a normal wine list at €39.99, and on some others much, much higher. At this point you can be sure that the restaurant is making more money from that bottle than they are on your meal. Where's the sense in that? The meal needs the work of skilled people to prepare, it takes time and effort and it takes many journeys from the kitchen to the table to serve. A bottle needs only to be uncorked and poured.

The effect of fixed-formula pricing on expensive wines becomes even more absurd when greedy restaurants apply a multiplier of three, or occasionally four times, to the wholesale price. This results in prices that make choosing good wines prohibitively expensive, making me wonder what then is the point of putting them on the list at all. Is it just window dressing? If restaurateurs would accept a smaller percentage mark-up on more expensive wines, then diners might just be encouraged to try some of the beter wines on a list.

Suggested wine

Haan Viognier 2002

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