The increasingly painful cost of wine in restaurants
And how to cut your booze bill when you eat out
Update 3/3/26: Given the news this week that restaurant wine prices have increased by 40% since 2020 I thought it would be worth reposting this article from September last year, along with my tips on how to cut your booze bill when you eat out.
I make no apology for returning to the cost of eating out which I last wrote about only four months ago as, if anything, things seem to have got worse.
The other day I went to a recently opened restaurant which I’m not naming ‘cos I think many others are in the same boat but it wouldn’t be beyond you to work out which it is.
The bill for the two of us was £124.28, not an excessive amount you might think for central London but considering we shared a bread course, a snack, a main course and a side and had only three small glasses of wine between us (we had been to an event earlier in the evening) it seemed more than a little steep.
The wine prices were particularly painful, given that one of the three we ordered was the cheapest on the list at £9. The dearest was £17 and even that wasn’t the most expensive option.
Two others on the regular list were £22 and £24. Add 13.5% and that’s £24.97 and £27.24 respectively. For 125ml glasses.
Given restaurants don’t pay as much for a bottle as we do when we buy the same wine in a shop it wouldn’t be unreasonable to reach the conclusion that there’s some profiteering going on.
Well yes and no.
An expensive refit and premium central London site have to be paid for somehow. And the cost price is probably higher than you think.
I help The Pilgrm hotel in Paddington as part of my role as their wine writer in residence (yes, great gig I know) and the trade price is often only a couple of pounds less than the cheapest retail price.
But most of the mark-up goes to meet basic running costs and tax which according to Tom Ashworth, the CEO of Yapp Brothers, has increased 40% on a bottle of 14% wine since 2020.
It might not be common knowledge but restaurants have to pay VAT on the price at which they sell the wine not on the price they pay for it.
The current #taxedout campaign being spearheaded by UK Hospitality spells out how little money restaurants are actually making. That’s partly due to the high rentals, raw materials and energy costs catalogued by my son Will in my last piece but also due to punitive rates of tax which have hit the sector particularly hard.
In the survey that UK Hospitality carried out, a third of restaurants said they were running at a loss or were having to reduce staff and opening hours while the industry has shed 89,000 jobs in the past year - three times the average for other sectors.
In terms of the service charge what the restaurateurs I talked to are saying is that it’s actually cheaper to remunerate staff this way than having to increase their wage costs which would attract further tax*. I believe them, I get it but, as a customer - and a wine lover, I still find it frustrating, particularly given how service charges are sometimes as much as 15% these days (and far more in the US).
*I have chapter and verse for this and could give you the figures but it would make this post about 500 words longer and you’d lose the will to live.
It was interesting that almost none of the accolades for top wine lists in the recent World of Fine Wine Awards went to UK-based restaurants with a couple of exceptions including the exclusive 67 Pall Mall members club. I imagine they can’t afford the highly paid staff or the stock.
(The other exception - the award for value - went to The Grape Escape in Cheltenham which I would check out, not least because they only charge £10 a glass for top Aussie producer Julian Castagna’s ‘Adam’s Rib The Red’. Read Nick Lander’s illuminating article on why the wine trade needs the restaurant sector here).
A recent post from restaurant insider Dan O’Regan’s excellent Substack Notes on a Napkin shows how the UK compares unfavourably with other countries when it comes to tax regimes.
But if you can see it from the restaurant industry’s point of view you can certainly see it from that of customers and - less publicised - suppliers. Most of the latter will admit, at least privately, that the restaurant business’s struggle with costs has made their lives considerably tougher too.
It’s hard to quantify but the net result almost certainly is that people are drinking less and, more worrying for the industry, going out less frequently too.
So what can those of us who love wine and love going to restaurants do to mitigate the expense?
I’ll be tackling that in our online tasting at 6.30pm this coming Sunday October 5th but in the meantime here are some general tips to keep the cost down.