Some Remarks on Mark Ups

One of the most contentious and (to many wine lovers) depressing things about wine is how much restaurants mark it up. On the average, restaurants will inflate the retail price of a bottle of wine by 100 percent — to cover, they insist, the cost of acquiring, storing, serving, and absorbing the expense of the occasional spoiled bottle of wine.

Naïfs accept this explanation; cynics, though, believe that because restaurants don’t make as much money as they want by serving food, they compensate with unfair mark ups on wine. Wine drinkers, then, are paying a surcharge to cover the penny-pinching teetotalers at the neighboring table — not to mention the greed of the restaurateur.

The truth lies somewhere between. This was brought home to me, as it were, while I recently abroad. Find out how by clicking here:

My sister and I went to lunch at her favorite Italian spot near her home in Plaza Chueca in old Madrid, where we had mouthwatering pizzas dotted with prosciutto, anchovies, and olives. And although Spain makes plenty of super quaffers that would have washed down our pies without a hitch, we did as the Romans do and ordered a 2004 Ramitello, a sangiovese-anglianico blend from a winery called Di Majo Norante in southeast Italy. We loved it. It was smooth, medium bodied, and surprisingly polished, with ever-so-slight flavors of leather and smoke. And was that a black olive note, or was that the pizza?

Anyway, we paid 17 euros for the Ramitello, which may seem like a lot for an Italian “country” red, especially considering how flaccid the dollar these days. (Seventeen euros comes to about 23 bucks at the current exchange rate.) But truth is, our pizza wine was a bargain. Stateside a bottle of Ramitello retails for $15 or more. I spotted a 2003 at a New York shop for $19.99. Which means that if my sister and I were sitting in an American venue, we’d have paid between $30 or $40 for the same bottle.

The lesson here? In general, European restaurants mark up their wine only slightly. (That’s because wine for Europeans is like another food group, and no restaurateur would think to mark it up differently than she would a croque monsieur or paella.) And yet they still manage to stay in business. In contrast, in the U.S., until very recently most people considered wine a luxury item, and that’s probably why restaurants can get away with charging diners higher a mark up.

So I conclude: the 100 percent mark up on restaurant wine is mostly ideological. Too bad we can’t demand a discount for having a raised consciousness.