Any wine lover who dines out knows that most of the time they’re paying far too much for wine. And restaurant wine pricing is getting worse.
Perhaps high pricing is due to millennial wine buyers’ interest in upscale wines without regard to the price or actual quality. To many people, this means that anything with a varietal designation is fair game.
Or perhaps it’s due to wine buyers who are willing to accept any blend that has a clever label or one that implies quality.
The restaurant wine rip-off gets worse as the quality of the restaurant goes up. And by-the-glass prices are getting absurd. (Note: A wine’s quality doesn’t suddenly improve just because it’s being served in a fancy restaurant.)
What we’ve seen in recent years is greater aggressiveness by restaurants when it comes to how much they charge for their wines. In many cases, prices have risen to levels that make no sense in relation to what the same wines should sell for in retail stores.
And with more retailers moving to discount pricing, the disparity is more evident than ever. Restaurant profit margins now seem to be exploding and for no reason other than greed.
Thirty years ago, the standard profit margin in restaurants was twice a wine’s cost.
A restaurant would pay, say, $20 for a bottle of wine, which had a suggested retail price of $30. By a generally accepted formula, most restaurants would mark it up twice its cost, to $40.
Depending on the image of the wine and the restaurant, some wines would be marked up even more.
I do not begrudge restaurants a fair profit margin. They have glassware to provide. They must wash and replace them in case of breakage.
And they have to carry wines in inventory, which is expensive, not to mention other overhead.
So I’m not troubled by selling current-release wines at twice their cost. Most such wines can be ordered as needed, limiting the need for storage.
But restaurant wine pricing seems to be rising faster than ever.
It started in the late 1990s when I began to see profit margins creeping up. Instead of twice wholesale, the margins at upscale cafés moved to 2.5 times cost.
So our example wine that cost restaurants $20 was marked up to $45 — or even $50.
Recently some upscale restaurants have increased their prices on some commonplace wines to levels that are simply absurd. Three times cost is now normal.
In a quality Westlake Village, California, restaurant recently, we saw Santa Margherita Pinot Grigio at $60.
Its suggested retail price of about $22 already made this utterly mediocre white wine not much of a value.
Worse yet, the menu said the wine was from the hilly, and respected Italian region Alto Adige.
It once did come from there. I asked to see the bottle.
The restaurant offering was not from Alto Adige, but from the lesser-quality valley area Valdadige.
In Scottsdale, Arizona, we dined at a supposedly upscale Japanese restaurant. The best wine for the food was Trefethen Riesling from Napa Valley. This excellent wine has a suggested retail price of $22.
The restaurant price was $70. So the restaurant is making well over $40 a bottle, which is a lot more than John and Janet Trefethen and their family make on the wine!
At an Italian café in Calabasas, California, last week, we found a fine Chianti Classico, Antinori’s Badia a Passignano, a good choice to go with tomato-y dishes.
Its suggested retail price is about $50, so it cost the café about $34. If you order it there, you would pay $125 – nearly four times its cost.
Decades ago, I was in Miami with winemaker Richard Arrowood at a popular and pricey bistro. As we walked in from the parking lot, Arrowood said, “Let’s have a bottle of my new Chardonnay.”
I noted that, for a (substantial) corkage fee, he could drink a bottle of that exact wine. He had a full case of it in the trunk of his rental car. But I was then unaware of the protocol in cases like this.
“He’s a client,” said the winemaker, “so we’ll just order a bottle of it off his list.”
As we perused the list, Arrowood exclaimed, “Whoa, he’s making a lot more on this than I am!”
Ripping off restaurant-goers by high wine pricing is a lucrative game played by those who know a bit more about wine than do average buyers – most of whom know approximately nothing.
There are no real rules of the game to help diners in this, but here are a few tips that may help:
- The more obscure the wine, the more likely it is to be a decent value. (Example: Italian whites like Garganega, Gavi, or Grillo often are marked up using smaller profit margins than domestic Chardonnays. And red Cotes-du-Rhône often is a diner’s best value.)
- Just because a wine is imported is no reason to pay a premium for it. (Example: Loire Valley Muscadet generally should be about $25 in restaurants. I’ve seen them at $35 and up.)
- Stick with reliable importers when ordering lesser-known wines. Trust Banfi (Italy), Kermit Lynch (France), Eric Solomon (France), Dalla Terra (Italy), Southern Wines and Spirits (multiple countries), Old Bridge Cellars (southern hemisphere), Deutsch Family (multiple), Terry Thiese/Skurnik (Germany/Austria), Cellars International (Germany), Neil Rosenthal (France, Italy, Spain, Switzerland), Chigazola Merchants (Italy), and The Spanish Table (Spain).
- When in doubt, choose the youngest white wines and avoid older vintages. (Example: In general, if ordering Pinot Grigio or Pinot Gris, 2018 is better than 2017; pass on 2015 and earlier.)
- With red wines, ask about vintages. For instance, some Northern California red wines from 2008 show evidence of smoke damage from the late-season fires.
- Beware of wines with a California appellation. Some may be fine, but it’s riskier than wines from a smaller appellation.
- For by-the-glass options, ask for a taste. Most restaurants will accommodate with an ounce or two.
- To research wines, log onto the website wine-searcher.com. One benefit: You can find out how much various wines sell for at retail outlets. (And don’t pay more than three times that price.)
- Call restaurants ahead and ask what the corkage is. Some savvy restaurateurs drop corkage fees (or waive them) on early midweek nights. In most restaurants, corkage charges range from $10 a bottle to $20. But consider where you are. A year ago, at a casual Windsor café, the corkage was $20 – but the glassware was so small and the wine list so bad, we left.)
- If you bring in an old red wine (15 years or more) and the staff opens it properly, a corkage charge of $30 may be warranted. In any case, with such wines, tip the wine waiter appropriately.
Wine of the Week
2017 Famille Lançon Cotes-du-Rhône, “La Solitude” ($12): Some red wines simply taste best when they are slightly chilled, and this is a great example of that. And the importer (Dreyfus Ashby) actually tells you this on the back label. The flavors of Grenache (50%) and Syrah (40%) dominate the aroma, but the flavors become a bit simplistic if the wine is served at room temperature. Chill it to 60 degrees or so, and the flavors become charming, and the wine becomes an excellent companion for lighter foods.
Dan Berger lives in Sonoma County, where he publishes “Vintage Experiences,” a subscription-only wine newsletter. Write to him at email@example.com. He is also co-host of California Wine Country with Steve Jaxon on KSRO Radio, 1350 AM.
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