Wine mark-ups, a restaurateur replies

Chris Chownwine-pages is delighted to present this guest essay. Chris Chown is Chef/Owner of the Plas Bodegroes, a restaurant with rooms in northwest Wales. Plas Bodegroes (Bod-egg-royce) is one of the UK’s top restaurants and holder of a Michelin “bib gourmand”. Chris was stung into action by a posting on the UK Wine Forum which berated restaurants for the “rather shameless fashion in which (customers) are being ripped offon wine lists”. Chris put down his stock-pot to take up the challenge and give his side of the story.So many articles criticise restaurant wine mark-ups that I asked Chris if his lucid and compelling explanation of why restaurant wine is so expensive could be archived.

Some people feel strongly about this subject and you can see a selection of responses by clicking the button at the bottom of the page.

The Restaurateur Replies

Wine lovers often express the sentiment that the average pricing policy for restaurant wines is unfair and unscrupulous. Whilst I am sad and embarrassed to have to agree that this is sometimes the case, I feel there are often-quoted generalisations which tar the whole restaurant trade with the same brush of greediness.

Of course there are unscrupulous sectors in any trade, profession or industry. But I am perhaps naive enough to believe that there are also conscientious businesses that will always strive to offer a fair deal. Another factor that makes such generalisations unfair is that the focus of complaints are often in on our great and glorious city of London, where it costs £10 just to look at a taxi. The accusers usually take another swipe at restaurateurs because they don’t accept our arguments that mark-ups on wine are justified and necessary. Let me try to explain the business of providing a high quality wine list in a decent restaurant.

I am a chef. I work in a remote area where overheads are low, but so are price expectations. There is strong resistance to high food pricing in Great Britain. I charge £24.50 for three courses of often Michelin-star standard food, upon which I do break even. If I price my own time in the kitchen at, say £8.00 per hour (not an unreasonably high wage I’d hope you’ll agree – I apprenticed for several years and am acknowledged to be among the top 50 or so chefs in Great Britain for 10 years now), to make any sort of reasonable profit I would have to charge double that, and nobody would come to my restaurant. I therefore have to subsidise my wages from my wine list. So the first of the usual “excuses”, given by restaurateurs – that the wine list subsidises food – has a measure of truth in it.

Moving on to actual markups, I would agree that an across the board percentage is unscrupulous, particularly as one reaches the higher echelons of the list. But is the restaurateur entirely to blame? I know several leading wine merchants and consultants who routinely recommend to restaurateurs that they “treble and add VAT”. The restaurateur takes this advice on board as an experienced professional opinion – my feeling is that it is a bad one.

I am in the fortunate – and for a restaurateur, notoriously uncommon – position of having a degree in accountancy. This enables me to equate a fairly simple formula to my wine pricing, namely:Selling price inc VAT = Purchase price ex VAT x 2.5 + £3. This balances the simple percentage, which penalises the expensive wine, and the over-simplistic flat rate, which would obviously be impracticable on cheap wines. Even then, for very expensive wines, if the formula comes to an astronomic sum, I take a view, and charge what I think is fair. I would point out here that my glasses are lead crystal, cost £4.00 each and are broken at the rate of 8 per 100 customers – my glass overhead is therefore considerably higher than if I used cheap heavy-rimmed glasses, which to my mind spoil the enjoyment of wine more than another few quid on the price.

I say over-simplistic as the flat rate proposed by many wine buffs out for a good deal ignores several basic economic and ergonomic facts. Firstly, in order to keep a comprehensive list, the restaurateur needs to keep fair stocks of fine and rare wine. The availability and turnover of these wines is by definition much lower than of cheaper wines, and there is a much higher chance of the wine being defective in some way. For instance, I reckon an average of 1.5 bottles per case corked in wines from Burgundy. I seldom if ever am able to reclaim this cost from the merchant. Secondly, there is a large degree of skill and time required in offering a balanced list, and a fair investment of time and money in the not entirely unpleasant task of tasting. The finer the wine, the less likely the merchant is to offer a free sample!

Another accusation often leveled at us is that restaurants rely on customer ignorance of what wine is worth. This is a patronising and insulting viewpoint. For many people, a comprehensive wine list, and the ability to peruse without necessarily buying expensive on every occasion, is one of the joys of eating out. Whilst many people advocate a Bring Your Own Bottle policy, this denies the customer the pleasure of being advised. Not many restaurant customers have comprehensive private cellars, and look to restaurants to help expand their wine knowledge and therefore future enjoyment. Do you go to your solicitor confident in your own knowledge of the law, or do you pay the man £300 per hour because he knows that touch more than you about it? Or perhaps you are the sort of customer who brings his own Turbot into a restaurant because he doesn’t trust the restaurateur to provide fresh fish.

Restaurateurs’ exploitation of innocent customers is not the reason some people won’t eat out in Britain. It is more likely that the paranoia of being ripped off, expressed loudly by a minority of the British eating out public, that casts a bad light over what can be as enjoyable experience here as anywhere else in the world.