Consumer Watch: Cafe mark-up not a wind-up

By Susan Edmunds

Dining out? Expect to pay 60-100% more for wine at a cafe

Do your own research, says Baduzzi's Michael Dearth. Photo / Michelle Hylsop
Do your own research, says Baduzzi's Michael Dearth. Photo / Michelle Hylsop

Next time you're ordering wine with a meal out, don't be afraid to order the cheapest - it's probably the best value.

There's a long-held belief that the cheapest wine the restaurant buys is sold as the second cheapest on the wine list, because that's the one customers are most likely to order.

Cafe and bar owner Ali Yildiz says it's true.

Restaurants know that they'll sell more of the second, third and fourth cheapest wines on their lists so they tend to be the ones on which they make the biggest margin.

His Massimo chain of cafes has a wine range made especially for it, which works out to be the cheapest of all the wine stocked. But it is sold as the second cheapest on the list.

"Most of the time it's what people will buy. It's human psychology. They don't want to be embarrassed in front of their boyfriend or girlfriend or the wait staff so, instead of the $8 glass, they'll go for the $9 one."

Customers could generally expect to pay a mark-up of 60-100 per cent on a bottle of wine at a cafe, Yildiz said.

More expensive restaurants would get wine cheaply direct from wineries and put at least 150-200 per cent on top of the price, he said. "Sometimes, they have to do it because you don't make much money on food any more. It's more about the drinks, coffee or alcohol."

That means that you might pay $30 for a $15 bottle of cheaper wine, and you'll pay at least $100 for a $50 wine, and so on.

Instead of having a wine writer tell you what's good and buying that at an inflated price, go and find wines you like on your own.


- Michael Dearth, owner of Baduzzi in Auckland's Wynyard Quarter

A survey of Auckland restaurants found that most were charging about double retail prices, although some were more like three times the price, such as The Ned sauvignon blanc at Non Solo Pizza and a bottle of Moet et Chandon at Andiamo.

Yildiz said the ideal for restaurateurs was to have a wine list in which none of the wines was available in shops.

But breweries often would push their own wine brands, which are usually stocked in supermarkets.

Consumers were fairly savvy about what wines cost, anyway, he said. They know what a variety from a certain area would fetch.

But, he said, New Zealand's $30 to $50 a bottle was cheap by worldwide standards.

"In Turkey, an average bottle might be $70 or $80."

Winemaker Allan Scott expected this year's harvest, due to be large after a strong crop last year, would flow through to cheaper prices.

But, he said, winemakers had learned from the 2008 year and were managing their crops better.

He did not think many winegrowers could afford to lower their prices much more.

"There's not much in it for them at $8.99 or $9.99 a bottle."

Scott said a reasonable restaurant mark-up was about 100 per cent, but some could go up to 400-500 per cent.

Customers can sometimes get a good deal on a wine by ordering a less well-known brand.

Brands such as Moet et Chandon always attract a premium even when they are on special at the supermarket.

Michael Dearth, owner of Baduzzi in Auckland's Wynyard Quarter, said his wine list was structured so that there were bottles for $40, $60 or $80.

"People can get a pretty inexpensive deal on outstanding wine."

Bottles that had won awards tended to be more expensive, he said.

"Instead of having a wine writer tell you what's good and buying that at an inflated price, go and find wines you like on your own."

He said there were enough wine varieties in Italy alone that people could have a different one each night for a year and still not get through them.

Baduzzi had some from the Peloponnese Peninsula for $40, he said.

"They are awesome and should be celebrated."

Scott said diners should not be afraid to ask for guidance.

"The wine waiter or manager will have some idea. I don't think anyone should ever be ashamed of asking."

- Herald on Sunday

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