How Much Profit Does a Restaurant Make on Wine?
You might be curious about how much profit a restaurant makes on wine and how to negotiate the best deal. In this article, we’ll go over the Average markup for a bottle of wine in a restaurant, how alcohol laws and taxes affect the price, and how to negotiate a good deal for a bottle of wine at a restaurant. You’ll be able make the best wine purchase after reading this article.
Average markup for a bottle of wine at a restaurant
A restaurant will mark up a bottle of wine at least 200 percent more than wholesale. This markup covers staffing, rent, glassesware, and the actual wine. Most restaurants will charge wine at fifty-six percent to sixty percent. The markup for jug wine would average four hundred fifty percent, while mid-priced wines would cost around two hundred twenty percent more. The markup on luxury wine, on the other hand, is lower than that.
A bottle of wine in restaurants can range from $20 to $60 depending upon the restaurant. This markup is common in restaurants that list their wines as a menu item. A $20 bottle of wine will typically run between $60-80. This can be even higher if the wine is particularly rare, expensive, or an exotic varietal. Fortunately, the markup is not that high for many wines, and the average markup for a bottle of wine at a restaurant is only a fraction of what it costs to buy at a wholesale price.
Wine prices are affected by taxes and alcohol laws
The average price of alcoholic beverages has remained unchanged over the last three decades while federal taxes haven’t kept pace with inflation. Wine and beer taxes have remained unchanged since 1951, and are now three to 67 cents for a 750-milliliter bottle. Although distilled liquor taxes have not changed since 1951, they increased by $2.00 for every fifth of 80-proof liquor in 1984.
Restaurants can find wine very expensive or affordable due to state and federal alcohol laws. Restaurants in Utah, for instance, must purchase their wine from state-run liquor shops, while Tennessee on-premise sales are subject to a 15% tax. These byzantine state laws can make wine pricing in restaurants seem like a minefield. Wholesalers may have to quote the same price for all restaurants, but others can negotiate lower wholesale prices.
A glass of wine in a restaurant is at the optimal markup
How much should a restaurant charge per glass of wine? Whether a wine is a bottle or by the glass, markup at a restaurant can vary, but most restaurants charge around three times what they would normally charge for a bottle in a retail store. A restaurant’s markup on a glass of wine, while not cheap, is still a bargain when compared to most of the overpriced food on a restaurant’s menu.
Most restaurants mark up wine bottles with a markup of about two to three-times the wholesale price, which can reach as high as two hundred and fifty per cent. That means a $20 bottle of wine can be priced at $60 to $80 in a restaurant. Restaurants also factor in the cost of the pour, which can range from twenty to twenty-five percent. Restaurants can make a 70% profit margin by accounting for the cost of the pour. However, this doesn’t mean a restaurant can’t mark up its wine at a higher markup.
Get a great deal on a bottle at a restaurant
When you order wine at a restaurant, the price you pay reflects how good the wine is. While some restaurants offer wine by the glass (or even by the bottle), most will charge more for the bottle. A bottle of $50 Turley wine should cost about $12 or $13 per glass. This is a much better price than the glass. But if you can’t resist the temptation to order the second-cheapest bottle, it doesn’t mean you’re getting a great deal.
Ask about the wine list. High-end restaurants will usually offer two wine lists. The “market list” is the one that features more mainstream and moderately priced wines. The other is called the “reservelist”. The second is the “reserve list”, which offers older, rarer and more expensive wines. Ask your server for the reserve list. Some restaurants won’t give it out without asking. Aunt Janie might have a stroke.