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The real reason your wine costs so much at restaurants

The real reason your wine costs so much at restaurants


Source: New York Post

By Steve Cuozzo

June 23, 2015


The same bottle of wine can come with shockingly different price tags at NYC restaurants – what gives? Prices of the same wine can vary due to a number of factors including restaurant location and what customers are willing to pay.


After 15 years of reviewing restaurants for The Post, I still get the jitters when the wine list comes. Sure, snooty sommeliers of old have been replaced by friendly faces who know how to sell more with smiles than sneers.


What’s daunting is knowing how much wines should cost. Never a cinch except for experts, it’s gotten harder than ever thanks to prices that increasingly run all over the map – sometimes even at places owned by the same people. Two new apps try to cut the vineyard jungle down to size, but only compound confusion.


Unfathomable pricing has always been part of the dining-out terroir.


Typically, wines in restaurants cost twice what someone would pay in a store and 3½ times the wholesale price. But that’s little help when: a) You have no idea what the wholesale price is, and b) You’re confronted by columns of half-familiar, confusingly named vintages from all over the globe.


It can drive you to drink – anything but wine, that is. And it seems that even restaurants don’t know how much wine should cost – eateries across the city are selling the same bottles at dramatically different prices. Silver Oak 2009 cabernet sauvignon from Napa, a mere $200 on Tamarind Tribeca’s remarkably fair-priced list, costs more most elsewhere, up to $300 at Asiate in the Mandarin Oriental hotel.


Tamarind has one customer “who comes just for Château Haut-Brion Premier Grand Cru 2006,” a manager explains. The popular Indian place sells it for $1,100, compared with $1,550 at Restaurant Daniel.


Another prized cabernet sauvignon, Quilceda Creek 2010 from Washington state’s Columbia Valley, ranges in the low- to high-$300s at the Capital Grille, Sparks Steak House and Union Square Cafe. But it’s $545 at Gotham Bar and Grill, which gets only eight bottles a year, says wine director Heidi Turzyn. Although wholesalers must sell wine to all restaurants at the same prices, a place with a very small supply may regard it as special and price it accordingly.


And, in a conundrum we’ve all faced, why is 1996 Château Lafite Rothschild $1,500 at Tribeca Grill, but $4,600 at La Grenouille?


“Comparing wines in that category is always tricky,” says Aldo Sohm, the celebrated wine director of Le Bernardin and Aldo Sohm Wine Bar. “It depends on when a restaurant bought it and in what condition” – facts that no ordinary customer is likely to know.


The seeming capriciousness of pricing may strike a diner as a wild frontier of terrifying peaks and ominous flat areas, with no Google Map to steer you through the wilderness.


“Everyone knows how much chicken costs,” says vaunted wine director Patrick Cappiello of Pearl & Ash, where more than half of its 2,300 bottles are $100 or less.


But “traditionally a restaurant’s profit is made on the beverage side,” explains Cappiello. Beverages, especially wine, are “where you can finesse numbers a bit to make up your bottom line.”

The seeming capriciousness of pricing may strike a diner as a wild frontier of terrifying peaks and ominous flat areas, with no Google Map to steer you through the wilderness.


Outright gouging is relatively uncommon. Unlike chicken and sea bass, vino values are subject to a jillion factors tangible and intangible. They include a restaurant’s overall operating costs; specific costs of wine storage and service; customers’ willingness to pay more at a place with rarefied atmosphere or reputation; the length of time a particular bottle has been in the cellar; and, sometimes, just plain whim.


Only a handful of places outrageously overcharge because they know ultra-wealthy and/or ignorant customers won’t notice or care. Per Se charges between $250 to $1,400 more for some of the exact same wines sold by the NoMad, Le Bernardin and Eleven Madison Park. Reps for Thomas Keller Restaurant Group, which owns Per Se, did not respond to a detailed request for an explanation.


A grayer area lies in the notion that it’s OK to charge, and spend, somewhat more for the same bottle in a restaurant that’s pricier or more famous than another, overall.


Why is 2010 Bonny Doon Old Telegram, a Rhône-style California red, $85 at Porter House at Time Warner Center, but $105 at ’21’? I much prefer Porter House’s menu. But the name ’21’ has been world famous for nearly 90 years, and those drawn to an “iconic” Midtown place might not sweat over a $20 difference.


A wider gulf applies to 2001 La Spinetta Barbaresco Vürsù Vigneto Valeirano Riserva at two spots run by the same company – B&B Restaurant Group owned by Mario Batali and the Bastianich family. It’s a lowball $225 at Otto Enoteca Pizzeria, but $350 at Babbo.


Casual Otto is known for $11 pizza, while entrees run into the $40s for more sophisticated Babbo. Diners should accept that at a game-changing, world-famous, modern-Italian restaurant, wine will cost more than at a noisy, cheap-pizza joint.


Yet I found a contradictory pizza paradox. A fancy barolo, 2000 Giuseppe Rinaldi Brunate-Le Coste, tips the scale at $278 at Danny Meyer’s buzzing Marta pizzeria. But at Meyer’s Maialino, a pricier home for acclaimed, Roman-themed Italian cuisine, the identical 2000 Giuseppe Rinaldi is only $245. How’s that?


Union Square Hospitality Group wine director John Ragan explained that Maialino’s wine buyers are particularly passionate about Barolo, and their “whole Barolo category is kind of a loss-leader” because they want to sell more of it.


“Of course, if you told me it was $100 less than at Marta, I’d get on the phone,” Ragan says with a laugh.


Another wild card involves when a particular bottle was purchased. Sohm points out that due to the astronomical run-up in values propelled by collectors and investors, “If a restaurant bought a rare, older wine recently, it will cost a lot more” than one purchased years earlier.


“It’s like the difference in real estate if I bought a property in a peak market rather than in a recession,” Sohm says.


Adding to the fun, even if a restaurant bought a precious wine for peanuts a decade or more ago, it might have marked up its price to customers as the wholesale price escalated.


Outright gouging is relatively uncommon. Only a handful of places outrageously overcharge because they know ultra-wealthy and/or ignorant customers won’t notice or care.


It’s unknown when 1996 Lafite first turned up at La Grenouille, where it’s $4,600. But it’s unlikely that the flagship of old-style French haute cuisine, in business since 1962, just went shopping for it yesterday.


The famous frog of East 52nd Street ranks among the mark-up monsters at the low end, as well – eater.com recently cited a $105 price for 2012 Chablis Premier Cru Jean-Paul et Benoit Droin Vaillons, which despite its impressive-sounding name retails for $25.99.


By comparison with La Grenouille and Daniel, where 1996 Château Lafite is $4,000, Tribeca Grill’s price of $1,500 seems like a giveaway.


David Gordon, wine director for Drew Nieporent’s Myriad Restaurant Group, estimates that Tribeca Grill purchased it “around 1999 or 2000” – when it obviously cost less than it would at wholesale today. But Tribeca Grill is among a handful of places that don’t inflate prices over time just because they can.


It’s easy to laugh over bloated prices paid by moguls for whom a $3,000 disparity is barely a rounding error. But I wasn’t trying to impress anybody at Midtown’s luxe new Chevalier when I spent $100 for 2011 Chateau Puy-Blanquet St. Emilion Grand Cru – peanuts for Chevalier’s list. The sommelier subjected the pleasant, unprepossessing Bordeaux to an examination with a candle for sediment and decanting.


The wine married well with chef Shea Gallante’s vividly realized, French-modern American dishes. But how did Chevalier’s C-note stack up against prices elsewhere? Although I couldn’t find Puy-Blanquet St. Emilion at another restaurant, it popped up at stores around town. At every one, even at Sotheby’s, it retails for just $24.99.


With a markup four times retail – twice the norm – I’d rather bring one of my own much better bottles from home and pay Chevalier’s $65 corkage fee. But they can use their candle.