Here's the wine list, heh, heh, heh

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In the book 'Matt Kramer on wine' (published by Sterling publishing) Matt covers topics from terroir to glassware to the various grapes and regions and personalities..

In the first in an exclusive online series, here is an extract titled 'Here's the wine list, heh, heh, heh'

Judging from letters that steadily stream into this publication, seemingly nothing irritates Wine Spectator readers quite so much as high restaurant wine prices. No sooner, however, does a hapless wine columnist let loose a puny little salvo, than a volley is loosed from the restaurant armada.

“There are . . . but a few restaurateurs who unreasonably stamp their wines up three, four, or five times,” insists Kirk R. Bergsma, the general manager of thr Waterfront Inn in Traverse City, Michigan. Michael Ballon of Castle Street Cafe in Great Barrington, Massachusetts, in that same issue, takes up the cudgel, “Any restaurant that marks up its wine three times its cost is doing a gross disservice to itself and its customers.”image from
This is the “Say it ain’t so, Joe” school of denial. Well, folks, it is so. Not only did Shoeless Joe do the dirty deed, but American restaurants are chronic pickpockets of wine-loving patrons. I’ve said it before and I’ll happily say it again: There are saints out there. The landscape is dotted with restaurants that offer fine wines at good prices. Even the miracle of well-selected wines at reasonable prices served in good glasses has been sighted. It’s even shaping up into—dare I say it?—a trend.

Nevertheless, the fact remains that the majority of restaurants typically mark up wines at three times their cost; e.g., a $10 (around £6) bottle wholesale sells for $30 (around £18). Cheaper wines see even higher margins, upward of four or five times cost. Want proof?
Not long ago, in my capacity as wine critic of The Oregonian newspaper, I favorably reviewed a wine labeled Nathanson Creek Cabernet Sauvignon. It was a deal: $4.95 (approx £3) a bottle retail. No such winery as Nathanson Creek exists. It is one of several labels  created by Sebastiani Vineyards.

Sebastiani seeks to limit sales of Nathanson Creek to restaurants (known as the trade as on-premise sales) and exclude it from retail shops (called off-premise sales). Such restriction is illegal in Oregon, as well as in other states. I surmised that they sought to do this to prevent Nathanson Creek from encroaching on yet another Sebastiani label, called Vendange, which is intended for retail sales.
Subsequently, I received a letter from Louis Willsea, a brand manager for Sebastiani, who wrote to offer both clarification and justification. Willsea provides an unusually frank—and accurate—depiction of the reality of the wine business, especially as it concerns the grotesque markups applied to wines by most restaurants.

Confirming that Nathanson Creek is a brand created for restaurant or on-premise sales, brand manager Willsea observes, “To maintain typical wine list margins, most restaurateurs avoid wines that are visibly promoted off-premise. This is not a comment on wine list pricing, simply a statement of reality that faces every winery which wishes to build off- and on-premise sales simultaneously.”

Put plainly, restaurants do not want their patrons to know just how much they are gouging them on wine prices. They particularly do not want to present low-cost/ high profit wines that their patrons might stumble across at the supermarket. But how do they know you won’t see such wines at Safeway or Costco?image from
"Most important to the restaurateur is the lack of a UPC bar code,” reveals Willsea. So that’s how restaurant wine lists are created: Never mind what’s on tin front label, look for a bar code on the back. “This means it is effectively unsalable in a scanned-sales supermarket context.” No zebra-stripe bar code, no supermarket sales. Nathanson Creek has no bar code; Vendange does.

Pity the poor restaurateur. It’s tough to convince some poor dupe to pay fifteen bucks ( approx £9) for a bottle of Nathanson Creek Cabernet when that same dupe just bought it at the supermarket for $4.95 (approx £3). Of course, for this whacking premium one does get the wine served in schlock glasses designed to meet or exceed the federal bumper safety standards.
Sebastiani Vineyards—which simply does what dozens of other wineries do — is whipsawing between the differing demands of restaurants and supermarkets. ”There is no subterfuge or ulterior motive in our marketing strategy for the two brands,” says Willsea. “We are simply attempting to provide two distinct products that will satisfy two equally distinct retail needs.”

Have you hugged your restaurateur today? (1994)
In 2001, Sebastiani Vineyards sold the Nathanson Creek and Vendange brands, along with several others, to a division of Constellation Brands, Inc., a conglomerate wine company that has gobbled dozens of wineries and labels. The sale slimmed Sebastiani from a seven-million-case wine business to one selling fewer than two-hundred-thousand cases. Today, both Nathanson Creek and Vendange have UPCs (Universal Product Codes), often called bar codes.

UPCs are today commonplace. While some big wineries continue to offer what the wholesale distribution trade calls “restaurant packs,” which lack the UPC codes, the presence of a bar code on a label has pretty much ceased to be a distinguishing feature if only because many high-end wines are now sold in supermarkets

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