Tastings: We need a new wine-pricing model

Much of the flood of Facebook comments, tweets, emails and other reaction to the column Jack Brice and I wrote on restaurant wine prices was from readers who appreciated the information but in many cases felt that we had left out the most important detail: the names of the restaurants guilty of the high markups.

As we wrote, the survey was of just 20 popular Pittsburgh restaurants and 280 wines from their online wine lists. Because not every local restaurant was surveyed, it would have been unfair to name the restaurant in each example given. The point of the survey was to take a cross-section sample to show that the pricing formulas found in some of our restaurants simply are not acceptable. Rather than make the same profit they make on food, it would seem that some establishments have a more "whatever the market will bear" attitude with wine. That was clear in markups of 500 percent and beyond. In wines sold by the glass, our survey found 51 examples of a glass of wine selling for more than the retail price of the bottle.

The story, however, is not about which restaurants are guilty; it is about a trend that is tainting lots of them.

It should be noted that because of Pennsylvania Liquor Control Board policies, the restaurants are not benefiting from the wholesale prices that restaurants in the other 48 non-control states pay. For example, take a wine that wholesales for $13.33 per bottle. The standard retail markup would put it on the shelf for $19.99. The PLCB would sell it to a restaurant for $17.99. Using the Caparoso/Zary pricing model, that means that in a Pennsylvania restaurant that bottle at the most modest markup will cost $58 while in West Virginia that same wine with the same markup will cost $43. That results in the Pennsylvania restaurant making a profit of $40.01 on the same bottle that in West Virginia resulted in a $29.67 profit, or almost 14 percent more than in our neighboring state. So while the PLCB is partly responsible for the high prices we pay, it is a fact that our restaurants, even when using the Caparoso/Zary formula, make much larger profits than restaurants in the 48 non-control states.

This, for me, has always been an argument for our state's restaurants to decrease the markup rather than to raise it. Some years ago, Kevin Joyce at the Carlton tried a formula of adding just $10 to the retail price of a bottle. That pricing was not practical and didn't last but it was a step in the right direction to get people engaged in wine. Corkage fees in Pittsburgh range from $10 to $29. I suggest that if all restaurants added just their corkage fee to the retail price of a bottle of wine, diners would flock to their restaurants and order lots of wines. It would be wonderful to see a new pricing model for wine sales in restaurants in Pittsburgh.

In the meantime, consumers might want to download a smartphone app to help with a wine-price check. I suggest wine-searcher or vinopedia, both free iPhone apps.

Next week, we'll publish feedback, including a long and thoughtful letter on the subject from Jennifer C. Mico of Pino's Contemporary Italian Restaurant & Wine Bar.


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