Taking Profits

As economy improves, by-the-glass drink prices are steadily on the rise

During an overnight stay at a Marriott hotel in Pittsburgh, my wife ordered us a glass of the house pinot grigio and a mixed drink.

The wine was a standard four-ounce pour from a not very interesting brand that sells for $7.99 by the bottle in a store. The vodka came in one of those squat glasses and amounted to about two ounces, depending on how much the bartender could manage to spill around the ice.

The tab? $23.

Thinking that the bartender had punched a wrong key, my wife asked if the bill was correct. It was: $12 for the vodka and $11 for the wine.

Outrageous pricing? Yes, and it’s not just hotels, but also restaurants.

So what’s going on? Just when we thought that by-the-glass prices could not go any higher, they have eased upward noticeably in many hotels and restaurants around Detroit, too.

This also happened a few years ago when wine started becoming more popular as a by-the-glass selection. But then, prices seemed to stabilize. Now they are clearly up again.

The question of why was put to a few people in the business. Privately they acknowledged that, yes, it is happening. One reason given by a Detroit restaurant manager is that prices were purposely held down during the financial downturn in an effort to keep customers coming back. But now that things are looking up in the economy, the restaurant business is now “taking profits,” as the Wall Street guys on the radio like to say.

This question was also asked of restaurant managers, by a wine publication on the West Coast where wine selections are vaster and pricing is 5 or 10 percent lower than in Michigan.

One former West Coast manager said there is no doubt that price margins have increased in the last decade. What used to be a $20 bottle in a store and was expected to sell for $30 in restaurants is now $40 or even $50, he said.

Today that formula, assuming one still exists, appears to be more like three or even four times the retail price, which translates to $11 or $12 by the glass, or nearly half the store price of a bottle, he told the newsletter, Vintage Experiences, published in Santa Rosa, Calif., by columnist Dan Berger.

The manager also complained about a dismal slide in choices now offered in restaurants. “I won’t drink that kind of wine at home, so why should I pay an outrageous sum for it at a restaurant?”

The solution? First, if you are in a group of three or more, don’t buy by the glass. Look for a bottle, and look for less common and unfamiliar grape varieties. The value on a wine list is going to be in the possibility that the owner or sommelier has a love of odd and little known varietals, likes inexpensive and esoteric red or white, and knows a few good ones.

Look for vinho verde, vermentino, muscadet, verdicchio and dry riesling among whites. In reds, nero d’avola, barbera, grenache, and malbec still offer high quality and lower pricing. Buy pinot noir and chardonnay in the store and drink it at home.

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