The economics of wine

How a €1.85 bottle of French wine ends up costing €30 in a Dublin bistro,and the other restaurants offering better value.

Eating in a trendy, casual city-centre restaurant recently I came across a modest French wine for €30. I happen to know the producer in France receives €1.85 for the same wine. The importer probably takes around €1.50-€1.70, the Government a generous €8.80, leaving €18 for the restaurant.

Seems a lot for opening a bottle of wine? High margins may be justified in the case of Michelin-starred restaurants that have huge overheads, a cellar of maturing wine and a team of qualified sommeliers. But a well-run bistro can turn over its stock of wine several times before paying for it, and the staff often don’t have any wine knowledge at all.

Arguably the real culprit is the Minister for Finance. Restaurant mark-ups here are roughly the same as in France and the UK (around 70 per cent), but our base costs are much higher. In France, a very decent €4 bottle of wine would cost €16 in a restaurant. The same bottle in Ireland would cost the restaurant around €9 from a wholesaler and €37 on their list. Recent increases in duty mean a wine that once sold for €25 in a restaurant is now over €30.