Tuesday, June 24, 2014

Whine about wine

Interesting article on the BBC site today about how much restaurants often mark-up the price of wine. Of course with all of the multifarious troubles going on in the world today what us rich (relatively) first worlder's pay for fermented grape juice in restaurants is fairly well down the list of United Nations concerns but never the less some of the mark-ups discussed would bring a tear to any news weary eye. Apparently (and topically) the new luxury hotel owned by Andy Murry (the tennis player) is charging £1800 for a bottle of 2002 Lafite Rothschild (a crap vintage BTW) whereas the same bottle at the Berkeley Hotel in London is a mere £990, the same wine retails for around £400 and could probably be bought at auction for even less. Most people would never dream of paying this kind of money for wine (neither would I!) but my point is not about the price, it's about the mark-up, i.e. it seems unlikely a small Scottish hotel near that well known tourist hot spot (Dunblane?) is actually providing £900 worth of "added value" to a commodity product; more likely, they are relying on the fact that most people visiting such a place either haven't got a clue about wine, are on company expenses or have more money than sense.

Many restaurants including Murry's hotel regularly mark-up wines by 4,6 or even 8 times their retail price. Many other products are similar, fashion goods are often 3 X wholesale and groceries 2 X, not to mention drugs and things like sunglasses but it's hard to think of anything with such a difference between the price in one outlet versus the price in another often only separated by a hundred yards of high street. Many would say "so what", restaurants should be free to charge whatever they like for the products they sell, fair enough, at the top-end at least, restaurants seem to be testing the limits of that theory just fine; but what does it say about an organisation that treats it's customers with such contempt that they are content for them to pay 6 times more for a product than any other retail organisation, who would happily sell the exact same bottle and still make a productive margin on it. I've heard all the arguments about there being no margin on food and how horrifically expensive those sommeliers salaries are, but such excuses don't wash with me; more than quadrupling your money for nothing more than a bit of storage space and washing-up glassware is pretty good business in any book.

Being a wine enthusiast it's frustrating in the extreme to visit restaurants that are charging £50 for a bottle of wine I know full well is available at a supermarket down the road for £10, it sucks all the enjoyment out of the experience for me and even though the food might be brilliant and created by the most talented kitchen team, I still feel ripped off. I have a personal rule these days; if I know a mark-up is more than 3 X retail then I don't buy the wine, if there's no wine left on the list to buy then I stick with beer and never visit that restaurant again. (having said that the mark-up on the beer, percentage wise, is probably even worse!) I would much prefer to visit a restaurant that keeps it's wine mark-ups between 1.5 and 2.5 X and spend more on a much better bottle than spend less on a bottle with a higher mark-up, up to a point, quality is more important to me than price.

Restaurant wine is a luxury product (in the UK at least), the selection and buying of which intimidates most people; however it can also be a wonderful companion to a meal with friends or family, a talking point, a binding agent and a source of pleasure that remains in our memories for a long time. Excessive profit taking is throttling the pleasure out of dining out; with the recession, the rise of craft beers and the industrialisation of eateries that's going on in our high streets it's time for independent restaurant owners to think again on wine margins, the current upward trend and shrinking market is ripe for disruption by someone who recognises the value of quality.

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