Being a wine lover in Philadelphia has its challenges, as I have mentioned a time or twelve. Briefly, for those just joining us, the Commonwealth of Pennsylvania is a liquor control state which means that the state has a monopoly on the sale of wine (and liquor) and one must buy wine from state run stores. The selection is horrible, the prices are high, yadda, yadda, yadda.
It’s miserable.
One of the advantages for a wine lover living in the state, however, is the existence of a large number of high quality BYO restaurants. In fact there are at least five within a 5 minute walk from our house.
As I mentioned previously, we are out on the West Coast and after having ditched left the kids with their loving grand parents, we headed up to Napa Valley for a couple of days. Thus, last night my lovely wife and I did something we rarely do–we went to a non-BYO restaurant (Bistro Jeanty in Yountville). Before I made the reservation, I did what any self-respecting alcoholic would do–I checked out the wine list online.
Bistro Jeanty has a nice wine list and I was tempted by many of their bottles. I also noticed that the wines were listed at, for the most part, twice the retail price. My initial thought was that this was quite reasonable particularly since restaurants in Philly typically mark up wines three or even four times retail, thus twice retail was not all that bad. Bistro Jeanty also has a $20 corkage fee if you bring your own bottle, which they waive if you buy at least one bottle off their wine list. Again, I thought this was rather reasonable.
I decided to opt for a bottle of the Pierre Morlet Champagne, $80 at the restaurant. As we all know, I am a bit of a Champagne freak and I have been wanting to try some of the Morlet for some time (a few years ago, Luc Morlet, son of Pierre Morlet and now Napa wine demi-god, gave me one of the best wine tastings I have ever had). I know this wine sells for about $40-45 retail, but we also had a bottle of pinot that we had bought previously that day and it all seemed to make good economic sense (I figured since we were “saving” the $20 corkage fee, the Champagne was “only $60”).
So far, so good.
As we were waiting for the wine to arrive, however, I started thinking (never a good thing).
“Is this a huge money grab, or is it just me?”
OK, I get it. There are costs associated with having a wine program at a restaurant: stemware, dishwashers, sommelier, storage space, ice buckets, training the staff, and so forth. I get it–it costs money and the restaurant is not there to provide me with wine at bargain prices. I get it: The restaurant needs to make money. Fine. I have no problem with that.
But.
2-4 times the retail price? First, I know that restaurants do not pay full retail–wineries want to have their product on the wine lists of good restaurants, so they sell it to them at a discount. (This is not the case in PA, however. Restaurants must but their wine from the PLCB at retail–they do get 10% off if they order the wine instead of just grabbing it off the shelves.) Second, why is the mark-up across the board? I checked out the wine list at Le Bec Fin and the smaller Fork in Philly (I had been to both of these years ago, and Le Bec Fin has since changed hands, but I am just using them as examples).
“Inexpensive” wines? 3-4 times more than retail. “Expensive” wines? 3-4 times retail. Are the costs of serving a $15 retail wine $45 while the costs of serving a $100 wine are $300? You could try and make the argument that the costs of the service are averaged out among all of the wines, but we all know that is a bunch of crap. The truth is that it an accepted “industry standard”, which is another way of saying “collusion” in my book.
This is not meant to serve as an indictment against any of the restaurants mentioned here. Not at all. My point is rather if BYO restaurants can survive and thrive without alcohol being served, why do we allow establishments that serve booze to gouge us?
Isn’t it just a huge money grab?
the drunken cyclist 
It’s ridiculous when prices are jacked up by 300 or 400 per cent in restaurants, particularly for cheaper wines at expensive restaurants. An absolute money grab considering the bottles are worth about £8 and they sell them for £24 or more.
And people wonder why I don’t eat or drink out all that much these days.
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I just don’t understand how they get away with it…
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Well put. We all need to rant on this. The same issue exists in Ontario with our government-controlled wine and liquor stores. Restaurants, in the main, charge at least 2.5 and more likely 4 times cost for their wines. And, as you say, it’s hard to understand a multiple of 4 for a wine that costs them $50 plus. Also, definitely a bit of wink, wink, nod, nod between restauranteurs. I read a great article somewhere that pleaded with restaurants to change their wine programs to introduce customers to more wines and that meant cheaper bottles, by the glass of most wines, and just a bigger focus in wine. BYO seems to be my future as well if there isn’t some moderation in pricing.
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A restaurant I know in Philly sells wine by the glass (good) but charges the cost of the bottle for one glass. That means a 500% mark-up! Come on…
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Anything alcohol related at a restaurant is a huge money grab.
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I guess you are right. A mixed drink at least takes some effort….
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I actually just stumbled across this article in the Washington Post from March 12th. Apparently, there is a restaurant in the Washington, DC area that does not mark-up their wine as much. Maybe we will see more of these popping up if us wine lovers make a big stink? Interesting read, and a place to check out if you are in the DC area.
http://www.washingtonpost.com/lifestyle/food/voltaggios-range-makes-its-wine-interesting-and-affordable/2013/03/11/28b86314-8615-11e2-9d71-f0feafdd1394_story.html
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You would think there would be a market for that and that they would develop a following (as long as the food is decent).
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Jeff, is it still true that “Friday Saturday Sunday” (restaurant near Rittenhouse Sq in Phila) just marks all of its wine list up by a standard price? Used to be $10, but would logically be more now, if the same policies were followed. I would go there just for that, back in the day. The “Nicolas” wine bars in Paris do the same, and they are our first choice whenever we want a nice bottle….
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I think they do, but we have not been there in a while. Maybe we should start going and “vote with our feet.”
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It is definitely a money grab, but really the only avenue to fleece their clients. They would get away with extorting their patrons over the food prices. What the patrons need to do is be prepared to “abstain” from purchasing wines with a $300 markup – then they may (?)start getting the message.
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I meant never on the food prices.
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You would think, but I am not sure there are many people buying those $$$ bottles (at least I don’t know any)….
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I know many people who pay lots of money for wine at restaurants.
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Can you send me their names so that I can become their friend?
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They are Germans 🙂
Just come to Munich, London or any other European metropole and you will meet many people who are willing to pay lots of money for wine at restaurants.
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Work in any company that involves sales guys, go to dinner with them and watch the w@nkers shell out for the overpriced plonk (with their wives nowhere to be seen). But I am with you – far too rich for my blood.
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While I would love to have some kind of revolt against markups, I’ve chalked it up to a cost of going out. So I basically surrender on this one.
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I hear you, and that is certainly a solid counter-argument since going out to dinner and not having wine is anathema to me.
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Well if you come to Munich I can suggest you a very good restaurant that prepares excellent Mediterranean food and serves wine at reasonable prices. Unfortunately, it seems to be an exemption these days. 3-4 times retail price is often normal. A restaurant that sells good wine makes usually over 50% of their profit with wine. That’s just how it is. I don’t think it has anything to do with government controlled liquor stores. Restaurants need to make money and as long as the customer is willing to pay exuberant prices then this won’t change.
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I agree with you on many fronts: I agree that a resto deserves to make money. I agree “that is how it is”. I also don’t think it has anything to do with liquor control laws (although I do think the apparent markup is higher in PA since the restos have to pay retail–I was at a winery the other day that gave me “the industry discount” which was 50%–that means that if the wine appears to be “only” marked up 100%, that means they are still marking up 400%, but it just does not seem that way).
Why customers still pay, I have no idea….
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I believe that customers pay high prices for wine because they actually have no choice. Who wants to go to a restaurant without drinking wine? Not many people for sure.
A dinner without wine is only half a dinner. The only other choice that customers have is not to go to restaurants at all. But in our society dining at restaurants is “trendy” so the majority of people would never decide not to go to restaurants anymore.
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I’m with you, Jeff. Wines (and alcoholic drinks in general) are a huge cash cow for the restaurant and hotel (do you want to talk about that?!?) business model. And I agree that there seems to be a de facto “cartel” in place not to hurt one another and happily screw the customers, so to speak. I am even convinced that, were the mark ups more reasonable, they would sell more bottles, especially in the high-end segment. In other words, I am not even sure the current model works in their best interest either…
Very good, thought-provoking post.
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I agree–lower the prices, sell more wine, everyone happier. but it seems that greed rules everywhere….
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They do the exact same thing in Australia. Annoys the crap out of me. Even the restaurants IN wineries (ie lots in Margaret River) – charge more, a LOT more, for their own wine at the table. And of course their own wine is all that’s available anyway! Grrr…
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Wow, that is truly over the top!
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BYO is great, but we don’t have any here. This is why we do a lot of cooking and wine at home…
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We have been very spoiled by the great BYOs here, should we ever move I am sure we will rarely go out to dinner….
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Good stuff. Being formally of the industry and running the fairest wine list imaginable, I regularly call into question the 3-4x markup in an open manner.
With that said, I had a “reverse” experience last night.
Legal Seafoods, being the behemoth that they are, has the ’06 Joseph Phelps Insignia for $145. That’s pretty much giving it away…as is the way Sandy Block, MW designed the list. Not as a money grab, but rather a return guest generator.
Most restaurants completely miss on this and become “special occasion” destinations and then struggle.
Great piece!
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Thanks for the comment! It is good to know that there are those out there that are actually interested in the customer! I have always been a fan of Legal Seafood and your comment makes me even more so! Thanks as well for checking out the blog….
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