Wineries and Vanity - Could I Be Wrong?
I buy wine for a specialty wine retailer, and I’ve been buying wine for one establishment or another for over 17 years. I’ve purchased a lot of wine during that time, and during that time I’ve built up quite a bit of curiosity and resentment toward the advantaged pricing structure and preferential treatment that wine wholesalers show restaurant wine buyers. Why on earth should restaurateurs pay less than retailers for the same bottle purchased from the same wine wholesaler? In trying to answer that question let’s consider a few things.
First, consider that wine retailers sell one hell of a lot more wine than restaurants do. Many more people will shop in a wine store on a given day than will consume wine at lunch or dinner, so the rate of purchase/consumption in restaurants can safely be described as very low versus that same rate among those visiting wine shops to buy their bottles. Obviously, wine wholesalers end up making much more money doing business with retail shops than restaurants…so why do they give restaurant wine buyers preferential treatment?
Second, the profit margins that restaurants build into wine are tantamount to highway robbery, to put it nicely. Much of a restaurant’s profit, at least in Colorado, is derived from beverage mark-ups because mark-ups on food are less easily disguised. The mark-up on a single bottle of wine can be anywhere from two to five times as much as the wholesale price that the restaurant paid the wholesaler for the bottle - ridiculous.
Not only is a wine lover held hostage by a restaurant’s wine pricing as they dine, but those who go ahead and spring for a grossly overpriced bottle of wine to pair with their meal end up paying at least double what they would for that exact same bottle had they purchased it from a wine retailer. What’s more, in the majority of cases the wine on the restaurant’s list is the same vintage that is currently available on retailer’s shelves; rarely can an argument be made that the higher price of a restaurant’s bottle is to compensate for the cellaring equity the bottle represents.
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