On restaurant wine prices ... again 14 August 2007

A link to a cheapskate's critique

From Vieilles Vignes

COMMENTS

From Tiny:
A nice article, and interesting the way the author uses champagne as a guage of the restaurant's mark-up policy. A glass of Drappier champagne at Aubergine restaurant in Cape Town recently cost me R85. A well-filled glass, admittedly. I'm not up to calculations, but that's a lot of profit on the bottle. But at least Aubergine has a great wine list and proper sommeliers. (And call me unsophisticated, but I reckon it wasn't such great wine, in fact, and I'd have been just as happy with Graham Beck Blanc de Blancs. My mistake in this case – though I can't remember what a glass of the GB would have cost me.) By the way, I think Vielles Vignes should name and shame.

 From Poor Tom:
Besides the obviously ridiculous prices asked for wines at restaurants and the use of some-bloke-who-can't-pour, another issue could be brought to the attention of the public – the blatant monopolisation (aka Distell-ization)of wine lists. Well, lets get some facts. Last Friday night the missus and I were feeling ‘lus’ for some steak and as we were close by to one of those Baron-steak places, we decided to give it a try. Now what is nicer than a glass or two of fine red with a prime side of beef (not that the wine or steak were any good there). So we got the wine list and to my horror (which happens very often at restaurants these days) I found that there was a distinct corporate wiff to the wine list, worst than cork-taint. I thought nothing of it at first, but after paging through the list again and again to find something to drink and each time coming up with nothing, I began to get peeved; because weren't there any local wineries in the Southern Cape and doesn't Stellenbosch produce any other wines? Well needless to say the extremely pricey Yellowtail-like Cab. didn't really do the job and nor did the food.  At pricier restaurants the story is much the same - limited choice and monopolisation of the winelists. Do average restaurateurs know that Soprano, Two Seas, Nedermountain and Pak-jou-tas are all made by the same company? Give folks a choice or should we stick to a beer or two with our meals (and support even bigger corporate-sharks)?

The corruption (because that's what it sometimes is) in the restaurant winelist business is an important matter, whether it's Distell monopolising the list in exchange for (well, for what, one wonders?) or whether it's restaurateurs demanding money down before they'll include a wine on their list. (Grape first wrote about these problems in an article in 1994.) It might not even be legal, because of their huge share of the market, for Distell to be offering 'inducements' to restaurants to effectively exclude their competitors, but no-one seems to be willing to take up the challenge. Or maybe, again, no-one can afford to take them on. But producers and distributors seem unwilling to name restaurants which demand what amounts to backhanders, and that is also a pity. It is certainly clear that the winelover (as well as the small producer) is the one who is losing out. – Tim James

 From Emile Joubert:
For the life of me I cannot see what the problem is here. Last time I looked we were going about our business in a free market. Willing buyer, willing seller. In other words, there is no obligation on a private, independent restaurant to stock a wine which the owner feels will be to the detriment of the business. By the same token, wine companies have every right to provide incentives to get a wine on the wine list. The restaurant can also refuse the incentive, accept it or ask for a better one. This is the way it works in the trade and there is nothing wrong with it. Cattle Baron may do it, and restaurants in Beaune, Burgundy do exactly the same. Anyone who thinks a restaurant worth its salt would stock a wine that doesn't move, is living in a pipe dream.

But how the incentives could amount to corruption is a truly ridiculous assumption. World Book Dictionary on corruption: corruption, noun.

            1a. the act of making, or the process of being made, evil or wicked. 

            b. evil conduct; wickedness. 

            c. a corrupting influence; thing that causes corruption.

            2. bribery; dishonesty.

How can paying an incentive to get a wine on a list be deemed corrupt, unless the incentive was 500grams of cocaine or a years subscription to Zoo Magazine. Get real.

Poor Tom and his ilk should get out more. Instead of whining, let your feet do the talking and find another restaurant if you think the relevant owner's wine selection and/or moral judgement is not quite as teflonic as yours. You have the right to choose, and so does the restaurant.

I used the word 'corruption' - and, Emile, surely you can see that establishing your winelist on the basis of what people pay you rather than on quality or suitability is problematic? Doesn't it amount to bribery if someone pays you (possibly under-the-counter money) money in order to influence your judgement? If someone paid a government minister to influence their behaviour in a purchasing matter we'd all agree that that is bribery and corruption. What's the essential difference here? I'm no admirer of the so-called free market, but it seems to me that squeezing out a small producer who can't afford to pay bribes is something of a distortion of the idea of freedom, surely?

'Wines that don't move' is not what's at issue here - noone has suggested that restaurateurs should stock such wines. If Distell's wines were such sure-fire sellers, there'd presumably be no need to pay backhanders to get them stocked, as is alleged to happen. – Tim James

From Gert:
Why doesn’t Grape start a blacklist? Serious. Your website could be an ideal platform for a list that consumers could check before they go out. If a wine rep etc. walks into the backhander wall at a restaurant he / she could send the details and it could be added to the blacklist.

The list can be simple. Restaurant name. What they want a winery to give to them for the listing of a wine etc. Herewith a few restaurants to start off with to whet the appitite: ... [Sorry, but much as we'd like to publish the names of the restaurants here, it might be libellous to do so, and we'd have to have a bit of evidence first, especially when the information is given to us under a pseudonym. If anyone gives us some first hand reporting of something of this nature, and will declare that they've been asked for a backhander, we will willing publish the name. – Ed]

From Emile Joubert:
Comparing a restaurant legally accepting payment to stock a certain wine with a back-hander to a government official is really laughable. If you have the guts to back up such a ridiculous statement, write a Noseweek article accusing the restaurants and the wine companies of corruption. The former is not illegal. It is an internationally acceptable practice in the trade: supermarkets, restaurants, night-clubs, bars. As for the tired "what- about-the-little-guy-moping": well, unfortunately this is the law of the jungle. Just as the little guy does not have a budget allowing for wall-to-wall advertising on television, radio and print, so he cannot also be part of a healthy business relationship between restaurant and influential wine company. Why bitch about someone else's business that does not concern you? Just go to a place that does not employ activities you deem to be corrupt.

 From Poor Tom:
I find it strange that people are so highly repulsed by the words ‘corruption’ or ‘monopolisation’. I'm sure a very good many of us have very harsh comments to pass about politicians who occupy, lets say,  the slightly moral-grey areas and wrongfully (harsh word that) use our tax rands, but find it perfectly fair and just for small producers to be obliterated in the name of ‘free market economics’!

Monopolies aren't that good unless they can use the rescources more efficiently than any other producer (or so say the Economics textbooks, unless they lied to sell more copies!). Great example is your local landline provider - they're a monopoly and that's why you pay aroundabout 200% more than any other country to phone your mom on her Tell-someone number! There are limitless examples of bad monopolies and a good number of examples of those that are to the benefit  of both the market and public. Unfortunately, I'm not wholly convinced that THE PRODUCER and the ‘marketing’ tactics THEY employ are for the mutual benefit of the industry or the wine-loving public (that's all).

Well all people can't be happy all the time, and I'm revolted by our culture of not complaining when there's something  fundamentaly wrong. Our whole New South Africa was built on the struggle for the freedom of choice and equality. Maybe Mr Joubert could suggest a restaurant or two for those of us in search of fine fare and a choice when it comes to the winelist. I'm sure any restaurateur will be glad to give you, yours and the little folk a free meal, for your valued endorsement. It'll be like your very own Nike endorsement deal.

From Vieilles Vignes:
Emile, it does sound to me you would love the title of the fire eater journo of SA, looking at your latest rant on all kinds of subject matter! Honestly tell me that you look at 70% of SA's restaurants wine lists and can say that is the absolute best they could put together at that price point in that wine category.

The point of the article is not to question how business works, it is questioning if it is working in synergy.

Your perception of corruption is a bit off the mark, as is your dictionary. In your terms, the arms deal saga was in no form corrupt? A supplier paid the precurement officer cash and or vehicles in hand to get the business. no corrupt relationship there! The Oxford Dictionary for corruption is as such. Adjective. 1: willing to act dishonestly in return for money or personal gain. From the Latin word: corrumpere ' mar, bribe '. Read the last one again if you missed it, pity the law system is built on Latin not the World Dictionary definition.

Lets give you another angle, let's not call it a corrupt relationship at the expense of all others, seeing that it's business. Ever heard of anti-competitive action lawsuits? Ask Microsoft; they know all about it. Which Scandinavian country’s importer did Distell buy into on condition they sever all ties with other SA producers?

From Sean Skibbe of South Hill Vineyards:
As a newcomer and boutique producer in this industry this is a matter particularly close to me. One of the key economic assumptions of an effective free market is perfect information, something which is glaringly absent here. As wine lovers, we cannot ignore the stifling effect that buying listings has on the smaller players in the industry. Whilst the free market is not without its flaws, and I understand that restaurateurs are not charitable institutions, I also believe that consumers who care about wine are entitled to know on what grounds restaurants select wines for their lists. It is then up to us to decide whether or not they deserve our support.

As much as I would love to see a blacklist, why not start with a more positive approach where restaurants who don’t subscribe to such behaviour are invited to come forward and present themselves as ‘wine lover friendly’?  

From Jean-Vincent Ridon of Signal Hill winery:
Regarding the comments on the price of the glass of Champagne Drappier at Aubergine. I had one glass there last evening, and the size of the glass allows the waiter to pour 5 glasses per bottle. This makes the bottle go at a price of R425. Knowing the trade price of Drappier, Aaubergine is making less than 100% markup, including a stock, winelist, and service found almost nowhere else. Thanks to Harald Bresselschmidt and sommelier Jörg Pfützner for giving us such a chance to drink French champagne for cheaper than I would get the same glass in London, Paris or even Epernay. So I would really not include l'Aubergine as a bad example in the way the wines are priced. And if your reader prefers Graham Beck, this is his choice in preferring this very well crafted Cap Classique, selling in South Africa at a higher price than many French champagnes (Brut sans année) do in France.

From Lise Kargaard:
As a consumer and not particularly clued up wine drinker, it does irritate me that so many restaurants have identical wine lists. Going out for dinner is the perfect time to try something new, and frankly I am getting pretty bored with the Distell collection. If there is no other (independant) wine on a wine list then the consumer has no choice on whether to choose a Distell wine or not. Why should the end consumer suffer?

Do Distell feel that they would struggle to get people drinking their wines under normal wine list curcumstances??

From Mark:
Good points Angela.I think you have hit the proverbial nail on the head! Is the debate about mark-ups, buying of winelists or in fact about what should be put into place to ensure that the whole experience, for want of a better word, makes you want to go back? Daily specials board for food, why not for wine? It would be good to get some comment from restaurateurs on this, from both chains and stand-alone outlets.