Wine Whine: Are Restaurants Jacking Up Wine Prices?

isante_magazine via flickr

In recent months, I've noticed a disturbing trend: The base price for a bottle of wine at the low end of a wine list in many restaurants has risen from around $30 to around $40. While $30-35 used to be the standard for the cheaper bottles on a list, many restaurants I've visited lately -- even casual, less-expensive restaurants -- have very few, if any, wines in the $30-40 range.

I was struck by this recently at Gjelina, which by most people's standards is a casual, pricy but not fancy restaurant. Glass prices there hover around $15 and the cheapest bottle on the list is $39. Glass prices were much more reasonable at Tar & Roses, starting at around $8, but only 2 bottles were under the $40 mark. I don't mean to single these restaurants out: The same is true for many lists at newer places around town, as well as established spots.

Why would this be? Are wine prices rising? Are restaurants deciding to do away with lower-priced wines for quality reasons?

It's unlikely. If anything, wine prices are falling or remaining steady. The market is full of fantastic wines that retail from $10-20, meaning the wholesale prices would be around $7-12. (Here's a decent Wine Spectator explanation of the usual markup on wine prices.) Traditionally, those wines would sell for $20-40, but lately I've often come across wines that can be bought for $10 retail -- and are selling on restaurant lists for upwards of $40. Which means that the markup is five times rather than the traditional two to three times. (I complained about this exact thing in a recent review of Mo-Chica.)

My guess is that while customers would notice if a new establishment was charging $15-20 for an appetizer and $30-40 for an entree, they're less likely to notice a $10 price hike for wine. It's perhaps the one place in a shaky economy that owners can see a way to increase revenue without being labeled as exorbitantly pricy.

Which is why, this weekend, I was pleasantly surprised by the wine list at Red Hill in Echo Park. It was full of interesting and odd choices, and many bottles were under $30 -- something that's a rarity, especially for newer restaurants. Maybe it has to do with their location and clientele, but these days I think any base of customers anywhere would appreciate value choices on a wine list, especially when there's so much value to be found in the market.

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