One of the most controversial topics we encounter on Food24 is that of restaurant mark-ups, particularly on wines. People have difficulty understanding any justification for them and get extremely irate when offered restaurant wines costing up to three times the retail price.
Having been a restaurateur, I understand how the costs pan out and so am usually happy to pay what I consider reasonable mark-ups. However, the only time I object very strongly is when the restaurant is on a wine farm and it puts a ‘normal’ restaurant mark-up on its own wine – this when it is sold at a fraction of the price in the tasting room, sometimes only feet away.
I recently raised this issue with a wine farm restaurant and in my email to them, I put forward the following reasons why I think it is wrong:
1. Customers have expectations about buying wine from a wine farm – whether it is in the tasting room or in the wine farm’s restaurant. They expect to get better prices from the cellar door than from an off-licence – after all, they’ve bothered to come all the way out there rather than just go to PnP – and they also expect to get better prices on the farm’s wines from the farm’s restaurant.
2. There are far fewer associated costs to selling one’s own wines than other wines – no transport, no distribution company, no agent sales commission, no storage, no cash flow etc etc so frankly, the wine costs you less to sell. Customers see this and know it.
3. The restaurant and wine farms fortunes are intrinsically bound-up in each other and part of the success of one lies in the success of the other. Would people go to the restaurant if it wasn’t on the wine farm? Maybe, maybe not – there are plenty of other restaurants after all. And after they’ve enjoyed a lovely lunch with the farm’s wines, aren’t they more likely to want to buy some more to take home? In my view, it makes no difference to the customers whether the restaurant is owned by the farm or not (if they even are aware of this) – any restaurant on a wine farm should support that farm and vice versa.
4. Visiting a wine farm for whatever reason is about creating an experience for the customer which they want to repeat. With so much competition about, neither farms nor restaurants can afford to give customers a reason to go elsewhere next time. Paying over the odds for the wine is a very good reason!
So what’s the solution? I think that wine farms should reduce their margins and sell the restaurant their wine at a lower price than any other establishment. And in return, I think that the restaurant should lower their own margins on those wines and see their sale as a marketing exercise.
In an absolutely ideal world, I love to see restaurants selling wine at the same price as the cellar door – examples include Pierneef La Motte, Clos Malverne, Ridgeback - but I know that there are associated costs with selling wine in a restaurant which it is unfair not to cover. I think either a small mark-up per bottle across the board on the cellar door price – something in the region of R30 - or an absolute maximum of 50% mark-up on cellar door.
So until I see that this kind of policy is adopted, these are some of the restaurants which I will regretfully be avoiding – and the reasons why:
Buitenverwachting – cellar door price of Buiten Blanc = R45, restaurant price = R98 (since I raised this issue with them, Buitenverwachting are carrying out a review and my fingers are crossed for change!)
Catharina’s at Steenberg – cellar door price of Klein Steenberg Sauvignon = R44, restaurant price = R80 (although they do sell Buiten Blanc cheaper than Buitenverwachting!)
La Colombe at Constantia Uitsig – cellar door price of Unwooded Chardonnay = R85, restaurant price of R145.
Jonkershuis at Groot Constantia – cellar door price of Groot Constantia Blanc de Noir = R52, restaurant price = R118
NB – Spookily enough, all these examples are from Constantia – is that a coincidence or are Stellenbosch, Franschhoek and Paarl just as bad?
What do you think? Do you think these mark-ups are reasonable? Do you know of any other winery restaurants marking up their own wines in this manner? Tell us about them!