That you don’t like it doesn’t make it untrue. I don’t think you understand that regular diners can be seen multiple times a week in a high-end restaurant. f you don’t think those diners would notice when prices go up, well, perhaps you have more experience than I do, but my experience tells me you are wrong. The mega-wealthy notice even the most miniscule price increases. Sometimes they accept them. I also suspect they would resent subsidizing your once-a-month visit to peruse the wine list.
I get that you want to believe you are the most desirable restaurant customer ever because you are smarter than everyone who works there about wine and wine pricing. You are wrong. Sorry. Not saying it’s right, or good, merely practical and mostly effective from a business perspective.
Okay. Bullcrap. Sure. This isn’t a generally dismissive and contemptuous statement about restaurant wine professionals. Where do you dine regularly without BYOB? Serious question. I hear there are lots of good, innovative wine lists in the Bay Area. Which do you patronize?
Nick, I don’t know why you’ve decided to cry about this. You might as well cry to me about the price of Musigny. You may want to be the target market for most high-end restaurants. God knows I wish most producers of Musigny would determine that my much-more-broke-than-you self was their target market. But my feelings aren’t hurt because I’m not #1 with Faiveley, Mugnier, de Vogue, Drouhin, et al. It’s not that you can’t appreciate it, or deserve it. Deserve’s got nothing to do with it.
Just to pile on here and then i’m running because I have better things to do than debate this issue. i run my business the way i wish and I’ll suffer the consequences, despite the advice of well mannered people who know much more than me about running a restaurant.
To support what Justin is saying and it may well be very different in Australia to the USA, but here a typical Restaurant’s wage percentage runs at 30 to 55%, a typical liquor store/ wine shop runs at 4.5 to 7%.
Interesting comment which I think is an important side consideration to the corkage debate. Obviously just a small segment of the BYO customer base is made up of wine geeks like us on the board - but, there is no doubt that most/many of us are regularly looked to by friends, family and collegaues for restaurant recs and most of us are actually listened to about the topic - perhaps even many times a month (or week). Not surprisingly the places that I recommend are the places that I frequent regularly and/or have wine dinners at and also not surprisingly the places that I frequent are the ones that permit corkage and often waive/modify corkage for wine geeks…
I doubt that any manager of a restaurant considers cateering to wine geeks and wine dinners as “marketing” but it is. Any business including a restaurant would love to have “opinion movers” on its side and among the short list of recs to their circle of influence (particularly when talking about a segment of reasonably wealthy or very wealthy custsomers. In fact, I think many businesses pay quite a bit of money and make quite a bit of effort to market to opinion movers - and, appealing to wine geeks by having reasonable corkage or waiving corkage and permitting wine dinners is probably a pretty cheap form of effective marketing dollars - even “if true” that they are actually “losing” some money over BYO. I also bet a decent amount of traffic has been driven to the restaurants that get mentioned regularly on this board and the Squires board. All of this is clearly unquantifiable - but so is most marketing and probably all marketing for a restaurant. I don’t have illusions that we create a lot of business or enough business to keep their doors open but quite a bit of marketing is for the marginal dollars and since it is unlikely that they are actually losing money on our business (rather than theoretically losing margin on an imaginary replacement table that may or may not exist), it seems like a potentially beneficial trade off.
A couple examples - over the years there have been a few places that have “taken the chance” on hosting our group’s wine dinners and some that have declined (we tend to do them on Mondays or Tuesdays when places aren’t busy). I know that those that have hosted us have received quite a bit of loyalty from the whole group apart from wine dinners and I and others have sent a lot of business their way (including our business dinners where we are not BYO and buying off their list for groups) - flip side, I don’t think I’ve bothered to go at all to the places that have declined (nobody in the group mentions that they go either) and I certainly have not sent any business their way. Just a couple weeks ago, we tried a new place - they weren’t sure how it would go and are generally busy even on weekdays, but they hosted us and treated us well (corkage only on a couple of bottles at a very low rate - we ordered a lot of food and probably tipped 50%) - first time I had been there - within a week, my subsequent recs to a family member and to a colleague had sent them two tables of high-end non-BYO customers…others in the group have already gone back and I plan to return soon.
Unless they know that they would otherwise fill our table at all (big if for most places on all but the busiest days) and if so, with people buying bottles of wine as opposed to all those tables that don’t, I don’t believe that they are losing money on wine geeks (maybe not making as much “margin” but that is a different matter) and may end up getting a bit of additional business driven their way. Again, no doubt that we aren’t the be all - end all of customers and we will never be the most profitable because we aren’t buying the huge margin wines but I still think it doesn’t make sense to discourage us.
The problem is that neither one of those are revenue-neutral unless it’s true that people who are paying corkage would otherwise order either the cheapest bottle on the list or an average-priced bottle from the list. It’s possible that’s true in some cases (if your BYOers are the type bringing in Yellow Tail or free hotel bottles) but if people are paying corkage for higher-end wine it’s a fair assumption that if they were not paying corkage they would be buying higher-than-average priced bottles off the list, and the corkage fee would thus need to be higher than the average bottle’s profit margin to make up for that.
The arguments that “we need high wine markups to cover the costs of wine service” or “we need high wine markups to because it’s our only high-margin item” are, economically speaking, incorrect. Pricing behavior, at least in the short run, is not driven by a supplier’s costs but by consumer demand. Ultimately costs can matter in that you’ll see suppliers exit the market if costs are too high relative to demand, which will cause prices to rise due to decreased supply, but costs cannot affect prices directly. If prices for wine are high, it has to be because there is demand for wine at those prices, which is probably because of the asymetric information problem.
We can add in Keith’s price discrimination theory here. Due to varying levels of information among customers, customers are willing to pay varying amounts for wine. A high markup allows the restaurant to capture revenue from the customers willing to pay those high prices. But if the restaurant is not running at full capacity, it’s leaving marginal revenue on the table by not capturing revenue from the customer segment that is priced out by the high markups. The costs of glasses/somms/inventory/etc. are all fixed; any additional revenue goes straight to the bottom line in an economic sense (not necessarily in an accounting sense, but that’s a different issue).
Now, for the most part you can’t variable-price the wine list and charge people different amounts based on willingness to pay because 1) it would be operationally difficult, and 2) you’d alienate your high-margin customers if they found out, which they probably would. But some places have found ways around that, for example by having lower markups for geeky wines that only higher-information customers are likely to buy. Corkage is another way to price discriminate. And it would make sense to have corkage vary based on how full you are. This is why we see some places have corkage-free Mondays, but I wonder if taking this further and, say, charging $10/bottle Mon-Weds and $50/bottle Thurs-Sun. would be more optimal than charging $25/bottle every night.
OTOH, you do have to worry some about a replacement effect. You only want to sell to lower margin customers after you’ve already captured your high-margin customers, but even with price discrimination you need a way to prevent the lower-margin people from taking all the slots (since you have fixed capacity). Is it better to be 60% full with all high-margin customers or 90% full with 30% high-margin/60% low margin? Impossible to say without data.
I think that assumption is made by quite a few managers/somms, BUT, in my opinion it is not necessarily the right one to make - if someone wanting to BYO at a particular restaurant doesn’t either because the corkage fee is deemed too high or because it is not allowed, I believe that the most likely outcome is that they will find an alternative and not dine there at all (leaving that table open for that time slot but for the small fraction of restaurants that are always packed) - with the runner up alternative as likely to be spread across beer/mixed drinks/wines by the glass as bottles unless there is a good selection at good prices, which then tilts in favor of buying a bottle that fits that person’s sense of QPR at the restaurant’s price. Given all of the focus on artisan beers at a lot of restaurants, if a no brainer doesn’t jump off the wine list at me, recently I’ve been far more likely to order an artisan beer or two which is more fun than settle for a wine I couldn’t care less about at 3x retail.
The decision as to the amount of corkage and whether to permit it (encourage it) to a certain extent is made prior to knowing the profile of the customer and therefore, it is most appropriate to consider it based on more average or standard parameters - balanced with the consideration of whether you want people to accept your terms and fill your table or are indifferent as to whether they just go elsewhere. A lot of patrons have no interest in wine - was just at a steakhouse the other night with 4 other people - nobody wanted wine - one person drank water, one ordered an ice tea, another a Bud Light and myself and another ordered one of the specialty beers that they have on draft. Didn’t take notice of too many other tables but most that I did see either had mixed drinks or beer with maybe some wine by the glass but not a single bottle.
I was being somewhat facetious on the ‘serving’ point. However, I’ll note that a retail store has to cover all of its costs solely off wine (except in places where they can and do sell other beverages).
Stemware - use the Riedel Restaurant series at $5/glass vs Vinum at $15-$25. As someone who owns both, the difference is very hard to tell. Cleaning and polishing? Um… you do that for water glasses in which you serve free water, yes? I get the wine glasses are more fragile, but complaining about the cost of cleaning wine glasses and then dismissing the cost of cleaning the other things you use seems… odd. Or is this another thing I should be underwriting as a wine drinking customer?
But overall, I’m with Keith’s first point - offer corkage or don’t. But don’t be dicks about people who bring in wine if you do offer it. If there are limits on it (no more than N bottles, etc.) state that CLEARLY upfront. I’m a fan of 'bring anything you want as long as it’s not on the list" coupled with a reasonable flat fee in the $20/bottle range. In return I think we as BYO people need to bring reasonable wines, tip on the bill plus what an average bottle off the list would have been and not linger overly long so that we’re hurting their ability to turn the table.
As for price, price however you like. Me, I’d price to try to maximize revenue/unit time, but hey, it’s your place. However, if you find wine sales are slow, you might want to consider that your pricing scheme is not a good one. I usually find that 2x retail is fair for the most part with some adjustments here and there for special wines. More than that and I view it as you, the restaurant owner (not Kent specifically), trying to rip me off. I’ll happily pay $45 for a $22 wine - I get that it’s part of going out and I’m fine with the markup. Paying $65? Eff that. There’s a difference between being a good business person and being a grasping greedhead. All the latter says to me is that you don’t care about wine drinkers.
Finally, consider this. I don’t care if you make a profit or not. All I care about is that you exist. Obviously, one’s tied to the other, but when you guys argue that the profit from wine sales are a huge contributor to your profit you also might want to consider that pissing off wine drinkers isn’t the best move.
I’m not a big fan of “rules” - either corkage is allowed or not, enough said - perhaps with a per person bottle limit if excess is an issue. Not being on the list while often a rule is a meaningless distinction to me - if someone is going to BYO, they will BYO and forcing them to try to figure out what is on the wine list (which are most often outdated on the website) or bring alternate bottles just makes it unnecessarily customer adverse - its not like they are going to say, notwithstanding that I have a case of it in my cellar, because it is on your list I won’t choose another bottle to bring but will just go ahead and order that one off your list…sure, right…just seems to function as a gotcha if someone hasn’t been able to look at the list in advance or the list on the website is outdated. Other rules like it has to be at least 10yrs old are well meaning to avoid the Yellowtail and KJ Chard, but stupid as well (so, I cannot bring my 2005 Aubert Chard? Or, my 2004 Grange?). Hey, to avoid the crap, how about corkage is equal to $100 (or $50) minus the suggested retail price of the wine brought in? So, $90 for KJ Chard but $10 for Aubert and free for bottles over $100 or $50? How about corkage of $20-30 per bottle flat but either stated or done in practice of $10-15 or free for wines over 5yrs old or over $100… not perfect but maybe corrects for part of what angers so many somms about what people bring in…
Like I said earlier, restaurant owners can do/charge whatever they want. It is their money and their restaurant, but if was me…I would do everything I could to bring in ALL patrons. When and if you are running your restaurant at peak capacity each and every day/night then I would start to discriminate who I wanted to dine in my restaurant. i.e. the more profitable diners. Anybody know more that a few that fit this criteria? It would be great if I could get every table to purchase a bottle of wine, but is that going to happen?
I only patronize restaurants that appreciate my business. And yes, I usually BYOB. If they don’t allow, I don’t buy a bottle of the list. A glass maybe, but that’s it. Just my personal preference.
What is the best etiquette regarding tipping if you bring wine and pay a corkage? Is the corkage for the restaurant, server, or both? I always tip heavy anyway, so not as much of a worry, but am curious as to the consensus on how to tip when you bring wine.
I tip heavier, figuring that the corkage fee goes to the restaurant. Sure the waiter is getting a tip on the corkage, but if I ordered off the list it would be more. Generally I’ll go with 30% on the check (inclusive of corkage). YMMV.
I don’t mind the ‘not on the list’ rule nor do I mind a bottle limit if a) it’s clearly stated when I call, on the website, etc and b) staff can waive it if I didn’t check, etc. In other words make them guidelines that the staff, at their discretion, can waive if that’s the right thing to do.
The reason I don’t mind the not on list rule is that I feel we as wine people have some obligations here too and one of them is not to be cheap. Don’t bring the $15 wine that’s on the list for $30. Don’t bring 8 bottles for 4 people and dominate the table all night. Use BYO as a way to bring something special or if the list sucks, to bring a nice wine that goes with the food, not primarily to save a few bucks.
I’ve seen the don’t bring the same producer rule (ie not even a different vintage). Needless to say, I never went to that restaurant. I believe that restaurant has since closed here in LA.
If I’m bringing wine, I feel that it should be at least 3x corkage to make it worth while or over $100. Whichever comes first.
Also, I try to compromise and do the bring one buy one rule.
The griping sommeliers are out of line IMO since here in LA, even the best wine lists rarely have anything older than 2006. The few 2002s or 2000’s that they have are seriously marked up into the $300+ territory for the non big name 1er cru bottles.
It’s funny that virtually every restaurant in San Francisco allows Corkage. There seems to be many highly profitable enterprises here. At multiple price points. Thank goodness for me!
I see many more complaints about having to provide health insurance to employees than I do about corkage. I guess if you want to take the emphasis off corkage in your town pass a law requiring businesses to provide health care insurance to their workers.
This has been mentioned by a couple of people and I can see where they’re coming from but I totally disagree.
Yes, IF Table 1 were to order an expensive bottle of wine, total margin on that table might’ve been lets say 300 dollars. 100 of that on food, 200 on the wine.
But that table had costs of the food, service + the wine itself.
IF Table 1 were to bring an expensive bottle of wine and corkage was say, 40 dollars, total margin on that table might’ve been 140 dollars. 100 on food, and 40 on the corkage.
But that table only had cost of the food and service (I’m leaving rent, etc out of both).
The idea that your total margin on each table should be the same even though the costs are different doesn’t make any sense although I can see from some people’s point of view why they would think that (Why would they want to make less on each table?). The flaw in that argument is that those same people would have bought an expensive bottle or even a bottle to begin with. There are quite a few patrons that don’t buy wine at all. In not actually giving up an asset (wine) in the sale, you’ve made money out of really nothing (cleaning and some breakage which is equal in this case). Service didn’t cost you anymore because those people are there regardless. It isn’t like the wine will go bad (the business is more likely to go bad before the wine) so it is an asset that can be resold later. It isn’t like everyone will BYO…And lets be honest, the very expensive bottles of wine are generally as a result of the very well off which probably aren’t going to BYO, and from business customers, which also aren’t going to BYO. An average patron might have a $200 (retail) bottle of wine they have saved for a special occasion but they’re not likely to spend $600 on a bottle of wine at dinner.
Other comments based on what others have said:
Running a successful restaurant doesn’t mean you know how to price corkage (Referring to the South Australia restaurant). There are plenty of places in Australia that have reasonable corkage for their place, including on some days, Tetsuyas (or they used to) and other hatted restaurants.
There are also plenty of successful restaurants (in Australia and all over the world) that try to make an effort to price their wine reasonably… Some are just a bit more than retail and they have plenty of success…So the argument that you have to gouge your customers to have a successful restaurant isn’t true. Also, as stated by several people, if a restaurant has an interesting and well priced wine list, there isn’t even a reason to BYO.
Restaurants and their owners can choose to run their restaurant however they want…I’m not offended in the least if a place doesn’t allow BYO…but if you do, don’t be offended when people do BYO.
I can’t think of a single top-end restaurant around Orange County here that doesn’t allow corkage. Most have a rate of $25 or less per bottle, the majority do not have a restriction on the number of bottles per table, and I don’t know of any that have a “can’t be on our list” policy. So it’s obviously not fatal to a restaurant to have reasonable corkage policies. [But I’ll also acknowledge that in cities where corkage is outlawed or rare, restaurants seem to get by there as well.]
Personally, I strongly dislike the “it can’t be something on our list” policy. You can’t always easily view a copy of their list, the copy you can find is often out of date, and it’s usually unclear whether it applies to different vintages of the wine or different bottlings from that producer. The worst part is that it just gives you an unsettling feeling as the customer, the sense that you’re being scrutinized over what you brought and that there is a risk someone may come and embarrass you by telling you that they will not open your wine.
One of the biggest positives for me about corkage is that I can bring great wine to a restaurant when we go out with non wine geek company (as we often do), everyone can have great wine, and nobody (particularly me) has to worry about the cost and how the others will feel about the cost. Without corkage, I’m usually going to be the one everyone looks to to make the selection, yet I’ll be in the awkward position of deciding, usually with no input, how much to spend versus how good a quality of wine to select. Stuck between buying simple wines of little interest or adding significantly to everyone’s bill with better wines, given the quality and markups on most wine lists.
Well said. I’ve gone out a few times in larger groups of non wine geeks who always ask me to select wine for the table. Hard to determine price/quality ratio they want and then end up with something not so good and waste everyone’s money.
This deserves its own thread - though has probably had its own.
I work it out two ways - and let’s assume it is a good dinner experience for which I would otherwise tip 20%. I’ll figure out what the cost would be tipping 25% on the whole meal (including corkage). I’ll figure out what the cost would be tipping 20% on everything, plus 20% on what I paid for the bottle of wine that I brought. Usually these two numbers are pretty close - and I’ll just split the difference.