Corkage at a wine bar where bottles are sold retail?

This is a dilemma for the current trend of hybrid store, like us. I have always grappled with this concept of charging a corkage fee to someone if they open a bottle that they pulled from my retail shelf and drank it at my bar.

My first inclination is that is doesn’t matter to me where you consume your bottle, whether it is at home or at my bar, you bought it. But more and more I am wondering if this outlook is a mistake. From a purely business perspective, yes. And I see many others charging a corkage fee for this practice.

Of course it costs money to keep up and maintain a bar, separately from the retail side of things, but does the good will of no corkage pay these bills? No.

Anyway, just curious of everyone else’s take on this subject. It is different from restaurant corkage in my view… or is it?

It is an interesting question. As someone who sees corkage wholly as a sham, I liked the concept of having a wine shop in store so to speak and charging a minimal fee to drink it there. I’ve encountered at least one place that carried a great selection of wines and very good prices and charged only $5 to consume it there. I like that trade off. They are making the retail mark up plus giving you an incentive to stay there and enjoy some of the food as well.

I’m not in the business (except the most important part of the business: consumer), and live in a state where retail and on premises cannot be combined, but here’s my take FWIW.

Charge a moderate corkage, something less than what the customer would pay if he took the wine elsewhere.

Years ago, All Seasons in Calistoga had a sliding scale for wines purchased in their retail shop and consumed in the cafe. IIRC (probably don’t, it really was a long time ago, when John Wetlaufer was managing the retail shop) it was something on the order of $3 for bottles that cost up to $15; $5 for bottles >$15 and <$30; and $8 for bottles >$30. At the time, I thought that was perfectly fair. In retrospect, it had an aspect of penalizing the customer for buying a more expensive bottle. A flat rate is probably better.

if you charge corkage, and it’s anything more than $5, you better be prepared to offer some sort of “quality” bar experience (i.e.: good food, large flatscreen t.v.(s), high quality stemware, comfortable seating, etc…). Of course, this is just my personal opinion that may, or may not, be shared by others.

Gee, I wonder what inspired this thread…

What are your bottle prices at the wine bar?

This is a foreign concept to me, as no such establishments are allowed to exist in the northeastern states I have lived and worked in my whole life. There are some close similarities in NY, but since they technically have to be separate entities (ie Morrell’s wine store and Morrell’s wine bar, separate licenses and businesses entirely with separate physical spaces, even though they could be right next door to each other) they can charge corkage.

In most northeastern states, this is the whole idea behind defining what is “on premise” and what is “off premise” sales. You buy wine, beer or liquor at a store to bring home, you should not be able to sit down and consume your pint or six pack or botle of wine on the premises. You want to sit down and be served drinks, you go to a bar, tavern, restaurant, etc.

The ambiguity that exists in the western states where this practice of wine bars existing in off premise stores confuses me. The closest thing we have here is the “taverns” of NJ, which are bars that are allowed to sell packaged goods. But it is understood that if you want to sit there and drink, you do so at the bar. You can’t buy packaged goods to take home and then sit there at the bar and consume them.

weird, i typed a reply and it’s now gone… nothing offensive, so I doubt it was deleted?

anyhow, to summarize what i wrote…

there’s more costing factors than just “does the goodwill pay for the bar services”.
obviously that’s a no.

but the goodwill may generate more retail sales. so does the additional sales you gain outweigh the cost of free corkage.

Example i gave was, there’s a shop near my place (wine retailer). located in an urban area, near a lake etc. if u buy a bottle there, they pop it for you, provide glasses, and even allow you to bring your own food in.
we go there on nice summer nights, buy usually a couple of bottles, bring some take out (from nearby restaurants), and just relax.
would we have purchased those bottles if we were charged corkage? no.

Great to hear everyone’s take on this.

And yes, the C. Grimm post in Wine Talk did inspire this thread but as it is a slightly different topic and one that I haven’t seen discussed before, I wanted to post it in the Pimp forum.

My feeling on this is that everyone has a different opinion and no one is right or wrong, per se, as evidenced by the responses already.

In CA, we are allowed to have 2 licenses, on premise and off premise. We need to purchase both, keep both renewed and pay a substantial amount in construction cost to meet compliance to ADA, City and County codes.

Jeff,
We made the decision a long time ago that if a customer purchases the wine from us and wants to enjoy it in our wine lounge we will not charge a corkage. We felt the goodwill was better than what the $5 or so $$ would do for us and the idea of having someone pay corkage for a bottle that they just purchased from us and walk from one room to another to enjoy it didn’t make sense to us. That’s just our opinion and many others do things differently.
If someone wants to bring in a bottle that isn’t from our inventory, that’s a different story.
The licensing you mention is strange, we (in CA) have 1 license for both on/off premise. The compliance for it is such a joy but that’s what happens when wine is categorized as a food. Maybe that’s what is meant by “I’m having a Hydraulic Sandwich for lunch”


Mark,
We also have customers that will order delivery or bring in food and buy the wine from us and hang out.

P.S. I’m not talking Berserkfests either !

Jeff,

Do you offer wines by the bottle at the bar? Are there differences in the prices? These are still the big questions. Even though it’s two licenses, are they separate spaces? I remember that the wine bar at Woodland Hills, though off to one side, was still in the same physical space as the store. I think that is the problem for you, defining your physical space could make the customer’s perception easier.

If I had the luxury of having a pay-to-play tasting bar I would think the best way to promote the store is to offer samples of what you have for sale and focus on specific tasting events. Buying a bottle at the store and not charging corkage would only make sense to me if you sell food as well, which gives you another profit engine if you’re not going to make profit by charging corkage.

If the “bar” is really a place to drink and hang out, and you want to promote it as such, then I would think that you need a knowledgeable pourer with bartending experience so it becomes a destination spot, or at least a point of interest, for folks who want to be able to keep up on hot new wines.

Thanks for the responses Brent, I appreciate your insights.

The retail and bar spaces are delineated, much like WHWC. This is actually an ABC requirement. There are signs posted for the over 21 section.

I do not offer bottles to buy at the bar for wine, just glass pours. A person would have walk through the retail section, buy a bottle and then go out of their way to venture into the over 21 bar area to drink it.

I will start offering certain beers by the bottle, however. And this is where the question came up recently with a chef friend. I charged him retail cost for a beer that he sat at the bar and drank. Of course he is a friend so I thought nothing of it. He called me later and said it was too cheap to be able to sit at my bar and drink, what was the equivalent of 2 beers with the actual bottle size, for only $4.99 and sit at the bar for over an hour.

Carrie, northern rules must be way different. I also remember you saying in my Rombauer thread that you could always buy just a box of the Chard whenever you wanted. Not possible down here… maybe I should move up north!

And Brent, the focus on the wines I sell flight thing is what I have been doing from the start. It does work.

Jeff,

Ultimately then I guess it’s got to come down to you and understanding your customer’s wants and needs. I think your chef friend is right. Having a guy plop down for an hour and downing a $5 beer or a $10 bottle of wine is not necessarily the crowd you want. But if that customer is a chef who is a loyal customer and neighbor, then it’s certainly worth it. However, if you have to set a common “house” policy for corkage, your friends should understand and/or you could perhaps offer a credit off a subsequent quantity purchase to offset the corkage for a 1 bottle purchase.

Looking at your website, you have pretty “normal” business hours, so I don’t see you really catering towards a “sit and drink” crowd anyway. And you offer a weekly tasting flight, which I would assume features any wines you want to move/new arrivals, etc.

Jeff,
we are still getting all the Rombauer Chard we want, no strings attached. As far as the licensing, ours is the type that no one under 21 is allowed in the building whether the wine lounge/ retail is delineated or not. It is an on/off sale .

I work at a retail shop that also has a winebar. When I am tending bar, I usually waive corkage. In most cases, it’s customers purchasing a bottle and trying it at the store to see if they want to buy more of that particular wine. However, I believe we have a nominal corkage fee (like $5), but it’s also discretionary on the barkeep.

sage move, veronica.

My local Winebar/Wineshop (Rick’s Wine Cellar in Marin) charges $5 to serve a bottle from the shop at the bar. I think they move a lot of wine that way, and I don’t think there has been any grumbling about the charge. The caveat is that people start buying bottles for everyone at the bar to share. This means that they can go through lots of glasses per bottle sold. On the other hand, this practice builds a ton of goodwill.

Good thread. I guess the broader subject does interest people.

Brent - you crack me up. “This is a foreign concept to me” (followed with lengthy replies!) But I largely agree with your comments.

I think it is a challenge to get consumers to get beyond the thought of “didn’t I just pay for it?” unless they are having their experience substantially enhanced at the wine bar.

I know the example is a full restaurant, but IIRC WineSellar & Brasserie in San Diego charges no corkage on bottles brought up to the restaurant from the store.

I liked Carrie’s point - do you comp a tasting portion if someone ultimately buys the bottle?

Veronica’s approach does discourage people camping at the bar, I’d think.

Do you have room to move on bottle price so that you can build in more of the costs of letting customers be served their wine in the wine bar? If the competitive market doesn’t preclude it, that would help you avoid the “nickle-and-diming customers” impression that you are trying to avoid.

What are your competitors doing?

This is a HUGE win all the way around. You will see more loyal and repeat customers returning, hanging out longer, buying more and drinking more from your selection.

I wish many others took this philosophy when they know they will come out ahead in the long run in every way.

Good on ya Bowmans!

Again, we don’t charge corkage. I was just curious about other people’s thoughts on the subject as I have noticed that others in L.A. do (not all, but some).

Jeff,
Quite a few places I’ve been in CA charge $5-$10 corkage if you buy off their shelf and drink at their bar. I don’t have an issue with it if the retail prices are reasonable. If they are overinflated, then I wouldn’t feel so good about paying corkage. But then again, being ITB I believe in patronizing your patrons. The love should go both ways IMO (and many times they waive corkage if they know you are ITB, buying off their shelf full retail and drinking at their bar.) Just my experience.