Utah Wine Economics 101 | Drink | Salt Lake City Weekly

Utah Wine Economics 101 

Why we pay more for wine than Californians do.

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Most metropolises in America are crawling with wine bars. I'm not just talking about places like New York City and San Francisco, but also Denver, Phoenix, Seattle, Portland, Dallas and others. Salt Lake City? Not so much.

There are good reasons for the lack of wine bars in the Beehive. The most salient one is economics. It's difficult to make a profit selling wine in Utah—be it in a wine bar or a restaurant—when the wines first have to be purchased from the state at retail prices. Unlike many other states, business owners and retail customers here cannot purchase wine at wholesale prices, nor receive bulk discounts they normally would in other states.

Thus, restaurateurs and owners of wine bars are at a disadvantage. To make a profit, they must mark up their wine from a retail benchmark—which tends to make the prices look exorbitant. I can't tell you how many times I've heard someone say of a bottle on a restaurant wine list: "$35? That wine sells for $12 at the wine store!" I've said the same thing myself.

But in order to cover expenses and make a small profit, wines are typically marked up by about 200 percent, meaning that a $12 bottle will appear on a menu priced at $36. Highway robbery? Not really. Think about the utilities it takes to keep that wine at the correct temperature, and the storage facilities. Wine has around a 10 percent spoilage rate, meaning that the restaurateur has to "eat" the costs for bad wines. Storage isn't cheap, especially temperature-controlled storage. And what about the staff that needs to be trained, and paid accordingly, in the ways of wine? There are dirty glasses to be bussed, washed, replaced when broken and so on.

Corkage in restaurants here is a volatile subject. Personally, I'm somewhat of two minds about it. On one hand, I think it's outrageous to charge a $35 per bottle corkage fee, as at least one SLC restaurant does. Who do they think they are? On the other hand, I understand the logic. The particular restaurant in question—OK, let's not be coy; it's Veneto—has a wine list composed mostly of wines that the owners went through the hassle to special order via the UDABC, and that's a descent into a special circle of Dante's hell. These wines can't be returned if nobody buys them. They were selected specifically to complement the cuisine of the restaurant, so why should the owners just shrug when someone brings in their favorite bottle of white zinfandel? The bottom line is that no one is forced to eat or purchase wine in any restaurant I know of. So, if some restaurateur chooses to impose a $35 corkage fee on customers who bring their own bottle, that's their prerogative—and risk.

The other side of my two-faced wine guy says, "Why have a corkage fee at all?" The reasoning goes: Encourage folks who love wine to come to the restaurant to make money on the food and put more butts in the seats than the guy across the street with high corkage fees. Certain restaurants, such as The Paris Bistro, have corkage-free evenings. Others, like New Yorker, impose no corkage fee at all—ever.

So the economics of wines sales in restaurants and bars here is unique. This ain't sunny California. But to quote a wine broker friend of mine: "Don't be a douche." If you're going to bring your own wine into a restaurant, make it a good one, and share some with the staff. You're not going to score any points with the sommelier with your BYOB Yellow Tail.

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