How Restaurant Wine Pricing Works

Great piece in the Wall Street Journal, which asks why a 2004 Opus One costs $195 at Houston’s in San Francisco but $425 at NoMI in Chicago.

Lots of reasons are in play: The fancier the restaurant (and fancier the wine service), the more you’ll pay. The more competition for high-end wine there is in a city (think Vegas, NYC), the more you’ll pay. The more popular the bottle, the more you’ll pay (try the Gruner-Veltliner!). And, interestingly, the less expensive the wholesale price, the more you’ll pay. (Figure 1.5-2x wholesale price for most high-end wines, but up to 3x or 4x for stuff that’s under $100.) Oh, and never buy a wine by the glass: Per-glass prices generally equal what the establishment paid for the entire bottle. Yow.

Also, never drink in Pennsylvania:

The varying wine laws and tax codes from state to state can affect restaurant prices. That’s largely the reason the 2005 Duckhorn Merlot costs $64 more at the Ruth’s Chris in Pittsburgh than it does at the one in Dallas, says Scott Offenbach, an owner of the Pittsburgh Ruth’s Chris. In Pennsylvania, the state acts as the wholesaler for wine, and it tends to charge restaurants close to retail prices. So even though the Pittsburgh price is less than three times wholesale, it’s far higher than the Dallas price.

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