“Why is wine so expensive in restaurants?”
I wish I had a cent for every time I have been asked that question. If you are confused or annoyed by the prices charged by restaurants and hotels, you are certainly not alone.
Wine and other drinks play a key role in the profitability of a restaurant. A typical gross margin is 60-70 per cent, and sometimes even higher for wines by the glass and house wine. One source told me this can rise to 75 per cent and even 80 per cent in some city-centre Dublin restaurants.
Let’s take 70 per cent as our end point. This would see a bottle of wine costing €10 excluding VAT from a wholesaler ending up at around €40 on a restaurant wine list. Often, this works out as two and a half to three times the retail price.
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