When a diner orders a bottle of wine at a restaurant, what should he or she expect to pay for it? While there are no strict guidelines, there are a number of factors that go into the final markup. Most restaurants will charge from two to three times wholesale, but more often at the three times price point. The retail price of a wine is around one and one half times wholesale. Thus a ten dollar wholesale wine is fifteen dollars retail. A three times markup is then thirty dollars, which is double what one would find in a wine shop. The question would be; is this fair?
Wine service, which is everything associated with providing wine to its patrons, is more than just the wine. Any restaurant offering more than a few wines has to maintain a wine cellar to stock the wines requested daily. Glassware must be purchased and cleaned regularly. Reidel glasses can cost upwards of $20 per glass, and there is always breakage. If you have not heard that ear-shattering sound of broken crystal at your local restaurant, they must be using plastic.
Upscale restaurants will have one or more sommeliers on staff, which is another cost, and so is the training of waiters to assure they can speak knowledgably about the wines and make suggestions. Leather-bound wine lists at these restaurants are also expensive, doubly so if the wine list changes periodically. Thus it isn’t too surprising when some of these establishments charge four times over wholesale.
Lettie Teague, wine columnist for the Wall Street Journal, recently did an in-depth article on this topic and discovered rising prices for wines was part higher markup and part higher wholesale costs. Since everything else seems to be costing more these days, paying a bit more for wine may not get everybody’s attention. It also helps to have a good memory for what one pays for wines before running the calculation mentioned above. Also factor in that retail prices vary by up to 15% or more and one can see the difficulty in determining when a particular restaurant is greedy versus just covering their costs.
Some patrons may give up and just order a cocktail (talk about markups), but for most restaurants a markup of three times wholesale is a fair price to pay for the pleasure of having wine with one’s food. High end restaurants may charge more because of higher costs, but the money made on alcohol can entice an eatery to charge more to increase profits.
Since many restaurants are online and make available their wine lists it is easy enough to verify what a given establishment charges for their wines. Then it is up to the consumer to decide if the food, service, setting and charm of the place override high wine prices.