Case for Corkage in Maryland gets VIP voice

Marylanders for Better Beer and Wine Laws (MBBWL) has a new voice assisting them in their battle for corkage for restaurants with liquor licenses in Maryland. The voice is the very visible Top Chef alumni; Chef Bryan Voltaggio of Volt Restaurant in Frederick. He has put his voice to paper on the pros for Maryland restaurants with liquor licenses to allow their customers to bring their own bottles of wine to their establishments. His letter is being circulated to liquor licensed restaurants to gain support and commitment to this endeavor. MBBWL is taking the campaign to the Restaurant Association of Maryland.

Voltaggio’s letter to the Restaurant Association of Maryland begins:

We are writing to ask for RAM’s help in rethinking the “NO” corkage policy for Maryland liquor license-holding restaurants. We are at a disadvantage to both restaurants without a liquor license and those in other jurisdictions like Washington, DC and Pennsylvania where corkage is legal. Our best customers are forced out of state on their most special occasions if they want to drink a particular bottle of wine because we cannot lawfully allow them to bring it onto our premises. We know many patrons that already drive outside Maryland for their birthdays, anniversaries, etc., robbing our state and industry of valuable income while undermining the relationship we have come to build with them. These very customers tend to be some of our best, and we would very much like to accommodate them. Given that unlicensed Maryland restaurant proprietors can already determine on their own whether they want to allow patrons to bring wine to them, we feel it only fair that we too should be afforded the same right. Legalizing corkage in Maryland would yield a number of benefits to licensed restaurants in our state

MBBWL’s Case for Corkage in Maryland

Maryland law currently prohibits a licensee’s customer from bringing their own alcohol onto the premises, thereby precluding the practice of corkage. Corkage is the ability of a licensed restaurant owner to set his/her own policy as to whether their customers can bring a special bottle of wine to drink with their meal. Licensees in many other jurisdictions offer corkage for a nominal fee (typically $15-25 per bottle) as a privilege to their customers so that they can enjoy a particular wine not on the licensee’s wine list. Unlicensed establishments are clearly exempt from this prohibition.

Washington, DC is the closest jurisdiction where corkage is legal, and the city attracts a number of affluent Maryland restaurant patrons who take advantage of it. We surveyed ten of the top independent DC restaurants about corkage and found the following:

On average, they charge $20 for corkage (DC City Council recently capped corkage at no more than $25 per bottle).

The price of the average bottle of wine they sell is $52.

On average, they had about 37,000 checks across all meals in 2009.

On average, they had 66 corkage incidents in 2009 – less than 1.5 times per week – or 0.18% of their total checks had corkage.

None of the restaurants reported ever seeing a patron bring a bottle of Yellow Tail.

Implications of this research

Restaurants can maintain a high-value wine program while still offering corkage.

High-volume restaurants overwhelmingly offer corkage when it is legal but do not notice a negative impact on their bottom line.

Corkage happens infrequently and patrons do not abuse the privilege.

Rationale for legalizing corkage in Maryland

Licensees are at a disadvantage to BYO restaurants – licensees cannot lawfully service their very own high-end customers that want to be able to enjoy an occasional special bottle of wine; they must turn away that opportunity or break the law.

Licensees are at a disadvantage to Washington, DC restaurants – affluent Maryland wine drinkers regularly drive to DC in order to be able to drink their high-end wines, robbing Maryland licensees of additional revenue and weakening customer loyalty.

Restaurants allowing corkage have more flexibility with their wine lists – offering corkage means a restaurant does not eed to tie up as much capital in its inventory to satisfy its customers’ diverse wine needs.

Harder to store older wines given limited budget and space – older wines require special attention and are very expensive to acquire. Many high-end restaurant patrons like to bring older bottles that they would otherwise not purchase from a wine list.

Customers that bring wine are more affluent on average and spend more – patrons that take advantage of corkage for the most part acknowledge the benefit restaurants are offering them. As a result, they typically order a bottle of wine or round of drinks from the bar and spend more on food.

Corkage is pure profit for a restaurant – restaurants charging a $20 corkage fee would have to sell on average a $50 bottle of wine to make the same profit. With corkage, there is no working capital needed and limited incidental costs.