What is an unfair mark-up on a bottle of wine?
- 24 June 2014
Andy Murray's Scottish restaurant has been criticised for selling alcohol at up to six times its retail value. How much of a margin is it reasonable for restaurateurs to make on a wine bill?
You're out for a meal and you turn to the wine list. The cheapest house red is £15. Or more. You look wistfully at the supermarket across the road. There the same bottle sets you back a fiver. Or less.
Diners have long griped about the mark-up charged by restaurants on vin de table. This grumbling will only intensify following reports that Andy Murray's luxury hotel, the Cromlix in Stirling, sells a bottle of sweet wine at approximately six times its High Street cost. The restaurant insists its offer is "fantastic value".
Bottles have traditionally been sold in eateries at two-and-a-half or three times cost price, says wine expert John Downes, but it is not uncommon to see it multiplied by four, five or even more. Recently he spotted an £8 bottle of Chablis being offered to diners for £47. "People are being ripped off," he says. "It's a fear thing - they feel intimidated. 'It says it's £40 a bottle, that's what it is, I'm not going to complain.'"
But restaurateurs say it's necessary to make money from wine because margins on food are so tight or non-existent. "If we marked up our food as much as our wine we would have to charge unrealistically large prices for it, and therefore the wine sales do partially subsidise the food," says Chris Chown, an accountancy graduate who owns and runs Plas Bodegroes restaurant in Gwynedd. He says his pricing formula is: Selling price = Purchase price (excluding VAT) x 2 + £9. This means a more expensive bottle is subject to less of a mark-up in percentage terms.
And wine is not without its costs. A good-quality wine glass in a top restaurant will cost at least £6, Chown says - at his restaurant, eight to 10 are broken a week - and a glass-washing machine will cost £4,500. A sommelier will be paid at least £30,000 a year - perhaps twice that in London. "A good sommelier will increase the guest's pleasure," Chown says. "If you're getting divorced, do you Google it and do it yourself or do you pay a solicitor £300 an hour?"
And if consumers really dislike the pricing structure, there's a simple solution - stay at home and have a barbecue.
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