Definition of Markup - in Europe

There is only one problem with this type of fixed mark-up, but it's a major one: If a bottle of wine corks, no problem with an 11 Euro bottle, profit on this bottle would be 5 Euros instead of 8. But with the 38 Euro bottle, the next four bottles only recover the loss.

So in priciple the fixed mark-up is quite OK, but in won't work with aged and/or high-end wines - you simply need a higher mark-up.

M.

If you had a special wine and brought it to a restaurant to drink with dinner...is that acceptable. And what to they charge you to allow you to bring your own wine there?

Dick

Salut/Hi dick,

le/on Thu, 13 May 2004 21:48:47 GMT, tu disais/you said:-

Not that this has anything to do with markups, but (as is often the case) it all depends upon the restaurant and you.

Given the much higher markups usually practiced in Europe, the sale of wine is much MORE important to them than you might think. So it is unreasonably to _expect_ to be able to BYOB. It's not the norm, certainly in France. However, I'm pretty well known in several of our local restaurants, and most times I buy their wine. So, if one time I wanted to bring a special wine to one of these, I'd make a point of asking them first, explaining what I wanted to do, and why. I think it would be inconceivable that they'd not let me. I'd also be astonished if they asked me to pay "corkage" (which of course isn't for opening the wine, but for supplying and washing the glasses).

There's one circumstance where I'd _expect_ to be able to bring my own wine. I've got a celebration coming up soon (a surprise party for Jacquie's 60th), and I've booked a banquetting room in a place where we're very friendly with the owners. I'm inviting 18 friends, and I've ordered a special meal. When discussing this with the owners, I said that I wanted to bring my own wines, but that they should make a point of allowing for this when they work out what to charge me. I didn't exactly ask their permission, but brought up the subject so early on in the planning, that they would have easily been able to say that the day didn't suit, or found another excuse if they weren't prepared to go along with me. I should add that they refused even to think of charging me corkage, even when I explained that we were talking about probably 4-5 glasses per person.

OK, these are circumstances when I _would_ be able to bring my own wine. I have mentioned others some time ago. In France, I'd not really consider doing it in a place with a very good wine list (unless I wanted to match a wine of mine against one of theirs which I'd buy, and then again, I'd ask very nicely first), even if I was pretty well known there. I'd never ask or expect to be able to do so one a first or second visit, unless circumstances were truly exceptional.

Salut/Hi Michael Pronay,

le/on 13 May 2004 21:31:48 GMT, tu disais/you said:-

Good point.

Unless the restaurant (as happens in the case I'm thinking of) has come to an arrangement with a caviste to get the wines almost on demand, and can get re-imbursed the cost of a corked bottle, because the caviste expects to be able to do the same from the winery.

IMO, the main problem is another one: A fixed mark-up is simply silly from an economical point of view: If a 40 Euro bottle is marked up 8 Euro it actually starts losing money if not sold within a two year period. Too much bound capital for next to no profit. The markup has to be a percentage of the cost because the owner of the restaurant has to make money on it.

However, here in Germany Restaurants still sell their wines for ridiculously high prices. The cheapest bottle of wine on the list of my favourite Restaurant is EUR 23 - it's an Albali Reserva 1998. Not at all a bad wine, but it can be had at a local shop for around EUR 3,70. On the other hand, a bottle of Moet & Chandon is only EUR 59.

When I asked the manager about this he told me that their calculation, in fact, is pretty much different than I had ever thought. The point is that they have to

Sorry, I hit the Enter key.

continued:

The point is that they have to turn around at least EUR 20 per customer, regardless of what he/she eats or drinks. So if the customer wants a cheap wine, he can have it - but he'll still pay the hidden "entry fee" of EUR 20.

Arne

"Arne Ahronovich" wrote

ridiculously

Hi Ian,

No the reason I asked is that sometimes when I go to a restaurant I find wines not to my liking or so high priced vs. retail that I bring my own.

Did not know how that is in Europe. Here they charge between $10 and $30 bottle to open. Obviously I don't bring Gallo in that case. But for an anniversary dinner I once brought some 1982 Chateau Margaux I bought for about $35 dollars and if it was on list it would be about $900 USD. So, I don't mind paying a small cork fee.

In area I live few restaurants have decent wine list...but its getting much better in the last 5 years as Charlotte is becoming a great city.

Thanks.

Dick

circumstances

There's a restaurant local to me that has a very small markup on good wine. It's as little as the 8 dollars mentioned here even for 50 dollar wines. He doesn't have a large selection, but an adequate one. And the list changes with his inventory. I think the distributor will refund for returned wine, so there would be no loss when there's a corked bottle. Is that possible? I'll ask next time.

I think the reason we don't see very low cost wines sold under $20 or Euro, is that a bottle of wine is equivalent for 4 or so cocktails. What restaurants sell cocktails for less than 5 dollars? Not many.

There is an Italian restaurant in Brentwood that sells Trader Joe's type

3 and 4 dollar wine for 10 bucks a bottle. I think it's a great scheme, they sell more food and it really helps keep the meal's cost down when several people are dining.

Perfectly possible, if the restaurant sticks to quick turning wines for which a refund is possible.

My reasoning came from Heinz Hanner who runs one the six best restaurants in Austria (according to the restaurant guide where I am responsible for the wine part)

with a wine list that's 1450 positions long and happens to list 22 different vintages of Mouton.

In Europe, a restaurant of your type, i.e. with a list of *fast turning expensive wines* is extremely seldom.

M.

Does the caviste really get refund from Sociando-Mallet, Maison Guigal or Joseph Drouhin for a 15 year old bottle? If that is true, congratulations! It certainly won't happen outside the country of production of a given wine.

M.

Hmm, everybody I know in the wine trade would express the markup as % Gross Profit or GP, which would be the cash markup expressed as a % of the selling price.

So if you work on 30% GP, your "markup" is 43% Joel