If you’ve ever felt brutalized by restaurant wine prices, you are not alone. Let’s take a high-level view of where your money goes when you drink at home or in a restaurant.
Here, an imported bottle that a winery sells to an importer for $10 ends up as $28 retail and $59 in a restaurant. Following the charts clockwise, you can see how the price builds from winery through to restaurant or retail. These numbers represent an average case and are based on Deborah Gray’s How to Import Wine.
As you can see, restaurants are aggressive with their wine markups– bottles typically sell in New York for three times wholesale. Rarely will you see lower markups, but you often see higher. Clearly, drinking wine at home is a better deal. Another option is paying corkage, which at $25 a bottle in many places makes more sense than paying the markup — not to mention you can bring a better bottle of wine. Good BYOB restaurants are also a nice option.
I think the gouging that happens in restaurants is a bit sad since it flies in the face of the concept of wine as an everyday beverage and an essential part of eating well. On the other hand, wine drinking is booming in America so I may be wringing my hands over nothing. Ultimately, as more people drink wine they will demand value and quality and hopefully these markups will fall.
Retail prices, however, actually amaze me. To drink a delightful top-quality Beaujolais for $20 is nice. But to have it thousands of miles from its origin, in perfect condition and available right down the street — that is great. Considering all the costs involved, I tip my hat to the better wine stores of New York for offering such value while turning a profit.
For simplicity these charts do not include sales tax, and other costs (such as import duties) are embedded in the figures. By “retail” I mean a quality independent wine store such as those I list on this site, and by “wine” I mean artisan wines from real wineries — not industrial-scale products, for which the business model is different. Similarly, markups on very cheap or very expensive wines may differ significantly.
For a nice overview of fine-dining restaurant wine markups see this article from the Wall Street Journal.