Restaurant wine markups: how to price your wines

Pricing wine on a list balances venue profitability and customer interest. The markup is the most common tool. It is simple, but hides a few traps, starting with VAT.

How the markup works

The markup is the ratio between the list price incl. VAT and the purchase price excl. VAT. A wine bought for €10 excl. VAT and sold for €30 incl. VAT has a markup of 3.

Markups usually range between 2.5 and 4 depending on the venue, wine tier, and house strategy. A neighborhood bistro often sits around 3. A fine dining restaurant may go higher on entry-level wines and lower on fine wines. There is no ideal markup: the right one turns over stock and fills seats.

A sliding markup

Many restaurateurs apply a higher markup to entry-level wines and a lower one to fine bottles to keep them accessible. A wine bought for €8 and sold for €32 (markup of 4) is standard; a wine bought for €80 and sold for €320 will stay in the cellar. At a markup of 2, it sells for €160 and still yields more in cash margin.

Another method uses a fixed cash margin per bottle: adding €20 or €25 regardless of the purchase price. It favors fine bottles and builds customer loyalty, but reduces margins on high-volume, lower-priced wines.

From gross markup to actual margin

The list price includes VAT, which is 20% on alcoholic beverages in France. To see the real margin, deduct it first: a wine sold for €30 incl. VAT yields €25 excl. VAT. With a purchase price of €10 excl. VAT, the gross margin is €15, or 60% of the price excl. VAT. This margin, not the markup, shows on your income statement.

Factor in hidden costs as well: breakage, corked bottles, unfinished open pours, service time, and storage. A markup of 3 does not mean you triple your investment.

Wine by the glass

A 75 cl bottle yields six 12.5 cl glasses. By-the-glass pricing must also absorb opened, unfinished bottles: it often uses a higher markup than bottle service, or bases calculations on five glasses instead of six. A wine bought for €8 excl. VAT and sold for €6 a glass yields €36 per bottle if finished, or €30 if one glass is lost. The key is pouring wines that move quickly.

Setting and rounding prices

A strict markup produces odd decimal prices. Round them consistently across the list, for instance to the nearest euro or half-euro, and check the scale: guests read lists top to bottom and compare. Neighboring wines at €29 and €31 make little sense; wines at €28 and €34 convey a clear difference.

Tracking margins over time

Purchase prices shift with every vintage and supplier. A wine list whose prices have not moved for two years has probably lost a point of markup without anyone noticing. Track the average list markup and margin excluding VAT per bottle, and recalculate with every delivery.

Save time while staying in control

In Tannin, set a markup for the entire list, then set an exact price wherever you want. Margin excluding VAT and average markup appear in your statistics, wine by the glass has its volume and price, and the printed list updates automatically with the mandatory details.