There has been a lot of talk on social media and in the press regarding the practice of wine listing fees in restaurants. A listing fee is a charge made by some restaurants and paid by a winery or wine distributor in order to put their wine on the restaurant’s list. The advantages for the winery are that they get to sell more wine, not only in that restaurant but, if the restaurant is part of a chain or very popular, then there are often knock-on sales possible from other outlets. The advantage for the restaurant is, of course, a nice cheque on a monthly or annual basis although some restaurants will also accept support in terms of menu covers, glassware, umbrellas, ice buckets etc etc.
Why is this considered a bad thing?
According to Michael Fridjhon writing in Business Day, listing fees should be considered as uncompetitive behaviour. Some outlets demand upwards of R24,000 a year to list a wine in their stores and this kind of fee is outside the reach of the many small wineries in this country. Sometimes it isn’t enough to pay a fee – a restaurant might also demand ongoing discounts and specials as well. The upshot is that a lot of restaurants list the same wines as each other because these are the wineries or brands who are prepared to pay.
This is not to say that the wines which we see again and again are bad wines – that isn’t the case at all. But it does mean that customers have less choice available to them which is not a healthy state of affairs in terms of the overall development of the wine industry.
What happens to the money?
According to David Clarke who owns a boutique wine distribution business, when he asks that question, most restaurateurs change the subject. If the fee went towards staff training or was used to promote sales or giveaways, or allowed the restaurateur to sell at lower mark-ups thus encouraging additional sales, then there may be some sense in paying it. But the general feeling amongst wine farms and distributors is that the money goes into the pocket of the restaurateur and nowhere else.
Are restaurants solely to blame?
No, they’re not. I’ve run a restaurant (one which never took listing fees or any other sponsorship) and margins are tight all round. If wine farms or wine distributors are prepared to pay you considerable amounts of money for you to list perfectly acceptable wines, then that is an irresistible temptation for many restaurateurs. Wine farms and wine distributors would argue that their margins and business models are also very competitive, with many brands in particular relying on volume sales in order to cover their costs. As long as they are prepared to pay to help achieve these volumes, restaurants will be ready and eager to accept.
What can we do?
In reality, very little. Fridjhon queried whether this is an area which should be investigated in terms of competition law but I feel that this is unlikely to ever happen – the people with deep enough pockets to fund such a case are the ones involved in the trade and therefore the least interested in changing the status quo. Calls to ‘name and shame’ restaurants accepting listing fees seem to me to be unnecessary – I think many people are able to identify familiar names when they see them and I think that the restaurants selling their list are unlikely to have any shame about accepting listing fees anyway.
For most people, the question of listing fees and formulaic wine lists is academic – they welcome the familiar names and are mainly concerned with price and not individuality. For restaurateurs who DON’T ask for listing fees – it’s very frustrating. To see the time, effort, thought and talent which goes into compiling a good wine list go unappreciated by customers is annoying, especially when you know your competitor is getting more money for far less effort. For wine farms and distributors, it is also frustrating to be constantly turned away – not because your product isn’t good enough, but simply because your pockets aren’t as deep as someone else’s.
Is there an answer?
From my point of view, I like an interesting and varied wine list. I like to try something I haven’t come across before, particularly by the glass – and I will confess to preferring not to drink at establishments where I feel the owner is undeservedly-pocketing extra cash. So I try and choose restaurants because they have an independent list and I think this is the solution. Business is business and listing fees will continue to be paid as long as they are accepted. Better to celebrate those restaurants who are making an effort and continue to offer them support, preferably at the expense of those who simply sell their list.
Some examples of good, independent wine lists:
Please let us know of any others near you.