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Friday Fishwrap
Highway Robbery Reported

By Stephen Eliot

I confess to just a bit of economic paranoia born of the Great Recession, but when dining out and choosing a wine, I keep feeling like my pocket is being picked, and I keep reaching for my wallet to make sure that it is still there.

Wine and food is my profession and my passion. I very much enjoy visiting new restaurants, and I do it frequently, but I am more apt these days to try a glass of this or that rather than springing for a whole bottle but for those times when I spot an especially good value. I am always on the look for something new and interesting, but I have become less adventuresome when adventure comes at considerable cost.

Earlier this month when sharing my thoughts on what and what does not a good wine list make, I mentioned my nagging sense that restaurant mark-ups on wine have been on the rise in recent years disproportionate to their general retail prices.

Well, it seems that I am not alone, and apparently my concerns come with real justification. Yesterday on the Enobytes website, Jeffrey L. Lamy offered a thoughtful and significant analysis of restaurant wine-pricing trends over the last dozen years, and I enthusiastically recommend that all those who suffer with my afflictions for fine dining and good wine give it a long look. *

In brief, Mr. Lamy makes a convincing case that wine prices in restaurants are, in his words, “outrageous.” He concludes after a concise presentation of comparative data that:

“All of the restaurateurs’ protestations notwithstanding, it is apparent to this analyst that most restaurants are pursuing a very devious pricing strategy. On one hand, they are holding food item pricing down so as not to discourage patrons from returning to their establishments. On the other hand, they are relying on exorbitant wine pricing to make up the difference in order to produce an acceptable overall profit.

The practice stinks! It leaves wineries with a black eye. And, it detracts from wine consumer adventurism in trying new wines.”

Now, wine has long been a significant revenue stream for restaurants, maybe the most significant one, in fact, but the rise in restaurant wine prices relative to winery FOB and wholesale cost over the same period of time is alarming. I know that I have a hard time considering wines priced at three and four times retail just for the privilege of drinking them at a restaurant, and no windy rationalizations about service cost, inventory or glassware will change my mind. If restaurants must pay ever more attention to keeping their fiscal ships afloat, so too does the average consumer, and I believe the latter is not a fool.

I would encourage those of a similar mind to Mr. Lamy’s and mine to do a little homework before heading out for a night on the town. Because of what I do for a living, I am quite attuned to what a wine really costs, but those who are not can learn a good deal from a few minutes on line. A good many restaurant websites provide links to their wine list, and it is not a bad idea to pick out several of their selections and follow with a few googling clicks to see just what those bottles might cost from your favorite retailer. It will not take long to get a sense of just how the restaurant views value.

There are plenty of fine restaurants that do, in fact, make painstaking efforts to find that right bottle at the right price, and there are some whose food is just so damned good that I am willing to put up with being fleeced, but I have grown weary of pricey wines that are no better than boring, and I am far from being alone.



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by Gerald Weisl
Posted on:6/1/2012 1:58:02 PM

Keep in mind, too, that California permits wholesalers and wineries to offer the same wine at different prices to various accounts, according to the type or category of ABC license.  As a result, many restaurants actually pay LESS for wines than do retail shops.

A prominent Napa vintner sells its Chardonnay to retail stores for $256 a case on a three case buy, while a restaurant can buy the same wine for $180 per case (on a one case purchase).

A famed Napa Cabernet winery asks $272 per case for its Cabernet blend, while a restaurant can purchase a box of this same wine for $192.

A Dry Creek winery asks stores to pay $204 on a three case buy of its Cabernet, while a restaurant buying two cases can get the same wine for $168 per case.

Another Napa Cabernet producer has a price tag of $660 on his famous little wine to a shop, but a dining establishment can pick up this wine for $552.  Chardonnay from the same fellow is $576 to a wine store, but $436 for a restaurant...

A highly "puffed" Cabernet from Napa costs stores $90 per bottle, while a restaurant pays $75 for the same wine.

Wineries believe this allows their brand to be better recognized in the market (or allows them to bleed off some inventory without, in their view, damaging their image).

In speaking with European vintners, we've heard they often ask higher prices from restaurateurs, as "everyone knows the restaurant will mark up the wine 300% or more" and many simply don't pay in a timely manner, anyway.

Go figure.

Restaurant Wine Prices
by Stephen L Glass
Posted on:6/2/2012 10:38:48 AM

Another ploy that restaurants regularly employ to jack up their wine prices is to place on their wine lists only high-end selectons in the first place.  For example, note those Italian restaurant wine lists jammed with Barolo, Barbaresco, Brunello, and innumerable super-Tuscans, with nary a Barbera, Dolcetto, Nero d'Avola, or Montepulciano d'Abruzzo in sight.

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