Have you ever wondered what factors contribute to the vast discrepancy in price for the same bottle of wine? Wall Street Journal’s Amy Ma explains that markups, quantity, and timing are considerations in price determination.
Wine storage conditions, the method of transport, and whether a wine is purchased directly from a wine estate or through a broker, may also influence price.
And some wine prices are determined simply on a whim. Harlan Goldstein, chef and owner of Gold, says his philosophy on pricing is random. “I’ll just tack on another HK$1,000 or HK$2,000 to the price that I purchased it for”
Take a bottle of ChÃ¢teau Margaux 1983, says Amy. At Gold restaurant, it costs HK$10,000. At Caprice, the same wine goes for almost twice as muchHK$19,500. L’Atelier de JoÃ«l Robuchon has it on its wine list for HK$14,000. At Cepage, the same wine, same vintage, is HK$10,610.
The sommelier of Cepage says there’s no set standard. Every sommelier prices his wines differently from the next.
“Mark-ups vary in the industry between 50% to 200%,”says BenoÃ®t Allauzen, sommelier for L’Atelier de JoÃ«l Robuchon. The more expensive the wine, he adds, the lower the mark up tends to be.”
Toby Marion, the owner of the Hong Kong-based wine supply company, Golden Gate Wines, says the more independent the restaurant, the more flexibility there is in the pricing of wine. They don’t have financial controllers breathing down their necks, like a hotel would”
Generally, wine prices change upward when a restaurant is ready to replenish its inventory. But as Amy points out, wine prices can fall and rise for different reasons, which can affect the price-setting dynamics.
Amy says the price of premium wines has recently risen dramatically. A bottle of 2008 ChÃ¢teau Lafite Rothschild sold for about US$260 in 2009, and cost more than US$1,400 in 2010.
But Golden Gate Wines owner Toby Marion explains that it’s difficult to gauge the price of wine on expectations of rising costs because wine costs haven’t been steadily increasing.
Amy notes that when Hong Kong eliminated the 80% wine tax in 2008, prices dropped dramatically. Additionally, the global economic crisis drove prices down another 40% world-wide. “This means a lot of the older inventory actually costs more,”says Marion.
It goes without saying that buying in quantity reduces price. The more cases of a particular kind of wine you buy, the lower the purchase price.
Caprice gets a good price because Caprice buys for the entire Four Seasons Hong Kong hotel, says Amy; the same goes for L’Atelier de JoÃ«l Robuchon, who buys for 10 Robuchon restaurants world-wide.
And, of course, being on friendly terms with a wine estate can be a great advantage for a restaurant.
“If you have a relationship with a wine producer, you may get a larger allotment of en primeur wines [wines purchased before bottled],”says Caprice’s Mr. Allano.