Some restaurants allow customers to bring own
CITYWIDE — A romantic walk along Santa Monica Beach — free. Two tickets to the Laemmle’s Monica 4-Plex Theatre on Second Street — $20.
A bottle of Diamond Creek’s Cabernet Sauvignon 2000 at Michael’s Restaurant on Third Street to toast the perfect first date — pricey.
In an age when the popular alcoholic grape beverage is becoming more attainable to the masses, with Trader Joe’s “Two Buck Chuck” and Australia’s yellow tail brand, which is sold in many supermarkets with prices ranging between $7 and $12, wine continues to be among the most expensive items on the menu in restaurants across the city.
At Michael’s, which specializes in California cuisine, a bottle of Diamond Creek’s Cabernet Sauvignon “Gravelly Meadow” 2000 will set a a diner back $285. That same bottle of wine can be purchased at NapaCabs.com for $144.95. Veuve Clicquot Ponsardin Yellow Label champagne can be purchased at Select Wines LLC for $39.90. That same bottle is priced at $109 at Michael’s — about 173 percent more than the list price at Select Wines LLC. Beverages & More [BevMo] has the champagne for $34.99.
“It bugs me when I go to a restaurant and see wine marked up 300 percent,” said Vicki Ho, of Brentwood, as she purchased a couple of bottles of wine at Wine Expo on Santa Monica Boulevard on Friday. “And that’s the average now.”
After visiting a restaurant and paying for an expensive bottle of wine, Ho likes to browse the Internet for the same bottle of wine and compare prices. “Every time I see a bottle at a restaurant, I think about how I can get that same bottle at a wine store for $20.”
The Internet has made it more convenient for wine enthusiasts to purchase typically expensive bottles of wine and champagne. Andrew Turner, the sommelier at Michael’s, predicts that the Internet will someday change the way restaurants price their wine.
Pricing wine is a function of the availability of the wine and the amount at which the wine can be purchased at wholesale, Turner said on Thursday. As the wholesale price goes up, percentage markup goes down, and vice versa.
“We sometimes get closeouts at unusually deep discounts and we would then have a higher relative percentage markup,”Turner said.
The name recognition of Veuve Clicquot, which can frequently be seen in the hands of celebrities, allows Michael’s to sell the wine at a high markup.
“Customers are not necessarily as inclined to take a risk on something they’ve never heard of,” said Turner.
Large retailers like BevMo might be purchasing their Veuve by traveling to Europe and buying the bottles for much less than what they are priced in the United States, said Ian Blackburn, founder of LA-based Learn About Wine. Blackburn, who teaches classes about wines and trains restaurant owners and employees on how to sell wine, said it is reasonable for restaurants to mark up Veuve Clicquot three times more than the price at which they purchased the bottles.
The industry standard is to mark up wine about 300 percent, according to Palamino Schuerenberg, a wine buyer for the Ma’kai Lounge on Broadway. The wine markup at his restaurant averages about 250 percent.
“People like myself, who are buyers, can work out deals for different people we buy wine from and charge less,” Schuerenberg said on Thursday.
Customers are willing to splurge for a nice bottle of wine at a restaurant, even if they know they could purchase it for cheaper at a wine store, because of one word — ambiance.
“You can obviously buy [cheaper at the store], however, you’re not going to be out. A lot of people, especially in LA, feel they need to go out,” Schuerenberg said.
The high markup for wine is a fact of life for restaurants that want to stay in business, said Robert Rogness, general manager at Wine Expo. In Europe, many restaurants charge a cover fee, averaging about $3, to every customer. That cover charge enables the restaurant to “cover” expenses like linens, fancy plates, utilities and employee salary. The benefit to the customer is cheap-er bottles of wine.
But in the United States, there is almost never a cover charge for a restaurant. Therefore, the price markup for wine is necessary for restaurants to afford the luxurious ambiance that customers enjoy like nice music, fancy plates and good service, said Rogness.
Unlike retailers, many restaurants in Los Angeles, where the real estate is one of the most expensive in the nation, cannot afford to purchase a large number of cases of wines at a bargain. The standard markup for retailers is 20-25 percent.
Rogness pointed to a bottle of Amarone 2001, sold at Wine Expo for $45. That same bottle can be seen at restaurants for anywhere between $100 and $150.
“On the flip-side, a lot of wineries and importers who want a wine to go away, but don’t want to hurt their image, will give a good price to restaurants, who in turn don’t pass that along [to customers].”
AND MORE EXPENSIVE WINE...
Suzanne Snell dined at a Santa Monica Italian restaurant on Monday with three friends and ordered a bottle of Chianti Reserve, 2001. She investigated the price online and discovered the restaurant had marked the bottle up 100 percent.
Snell orders a bottle depending on how many people in her party will drink. If she’s on her own, she opts for a glass instead.
French restaurant Melissé on Wilshire Boulevard, voted the No. 1 restaurant and No. 1 wine list in Los Angeles by Zagat Survey, charges $215 for a bottle of Kistler “Durell Vineyard” Chardonnay 1998. That same bottle can be found at WineAccess.com for $95 — a 126 percent price difference.
Another Kistler vineyard Chardonnay, the “Cuvee Cathleen” Los Carneros 1996, is priced at $260 at Melissé, whereas Shop.com sells a cheaper version for $129 — a 101 percent mark up.
But not all wines are more expensive at Melissé. WineGlobe.com sells a 2000 made bottle of Chateau Haut-Brion Pessac- Leognan Bordeaux for $279.99. Melissé lets it customers drink the French region wine for $200, a 39 percent difference.
Italian restaurant Locando del Lago sells the famous Veuve Clicquot for $79, a 125 percent difference from the price at BevMo.
Other marked-up wines include a 2004 bottle of Sauvignon Blanc, produced by Cakebread Cellars for $46. WineAccess.com sells the same bottle for $24.99. Robert Mondavi’s Cab Sauv Reserve 1999 costs $94.99 at GothamWine.com, but at Lago, the wine costs $190.
“I’ll sometimes buy a bottle of wine [at the restaurant], but it still irks me that they mark it up so much,” Ho said.
“I’LL SOMETIMES BUY A BOTTLE OF WINE [AT THE RESTAURANT], BUT IT STILL IRKS ME THAT THEY MARK IT UP SO MUCH.” — Vicki Ho Wine lover, Brentwood
STICK A CORK IN IT Some restaurants will allow customers to bring in a bottle of wine that does not appear on the wine list. The corkage fee averages about $20.
In terms of business survival, it would make more sense if restaurants allowed customers to bring in corkage and eliminated or minimized the wine list, Rogness said. If so, the restaurant would basically receive free money with the corkage fee, and would not have to worry about maintaining the extensive wine list.
Blackburn agreed that it would help businesses to allow customers to bring in their own bottles.
“I think some restaurants should almost be happy when someone brings in a nice bottle of wine and agrees to pay the corkage,” Blackburn said. “I encourage restaurants to charge a corkage, to let customers bring in a nice bottle of fine wine,” he said.
“Those are the people who are going to eat out a lot.”
Originally published in the Santa Monica Daily Press print edition on December 30, 2006. Read the original PDF.