Go For the Bottle?

DESCRIPTIONPhoto: Daniel Hamermesh

In American restaurants, I have always seen a glass of wine (perhaps 6 to 7.5 ounces) sold for at least 1/3 of the price of a bottle of wine (750 milliliters=29.6 ounces), so that the per-unit price of a glass is typically at least 1/3 more than a bottle. In the U.S., it’s always cheaper to buy a bottle of wine than buy glasses if you are having 3 glasses or more. In the Parisian restaurant we visited, the per-ounce price was the same whether you bought a glass (150 milliliters) or a bottle (750 milliliters). Indeed, even a carafe (pichet) of 500 milliters was sold at the same per-unit price. Why did the restaurant do this, given the costs of fetching the bottle each time and pouring glasses (as opposed to uncorking once and leaving the bottle on the table)? Also, given the mark-up on wines at restaurants, the owner should have an incentive to get customers to buy more wine-to buy a full bottle. I don’t understand what seems to be a pricing anomaly.


Tim Harford

Perhaps the Parisiens hope that you will buy a bottle AND an extra glass or two of wine? A very European perspective, I know, but still.... cheers!

Jean-François

Because the French relate differently to food, and especially wine. Wine is a staple, not a luxury. It is part of the culture. Many restaurants also have sophisticated "by the glass" dispensing systems.
Even better, in most restaurants a quarter litre of wine is cheaper than a Coca-Light (diet Coke) ;-)

Eric Wallace

I really think its because the Europeans do not understand capitalism at its purest form and that is too make money.

Daniel B. Fukuhara

I'm perplexed as well,.....I was under the assumption that EVERYONE was motivated by competition through capitalism and not competition through quality of craft. Agreed, someone not possessing an inflated Western style of thought is quite the "anomaly", if not an all out faux pas. Keep the reasonable prices for the serfs.

Sam

You're correct that from a purely economical perspective, it makes sense for restaurant-goers to buy a whole bottle when drinking three or more glasses. However, this doesn't take into account what each person is ordering. If members of a particular dinner party are eating different plates, this might influence the type of wine they'd like to accompany their meal. That said, I wouldn't be surprised if in a country like France, which takes such pride in its culinary tradition, restaurateurs wouldn't want to penalize their patrons for ordering different glasses of wine to appropriately complement their meals. This is just my theory.

Béranger

Apparently, the wine consumption in France has declined, it is not what it used to be decades ago.

Simply put, they sell less bottles of wine. So they decided to design an incentive in order to turn people from beer, Coke, whatever, to wine: make the glass of wine more affordable!

Hence, having a "fair" price of a glass of wine would make people more attracted to the wine consumption.

After all, when you buy per glass, you can drink a different wine with each course, so with a lunch or dinner you could "discover" a wide assortment of wine, possibly making you a wine aficionado in the end.

See these articles (in French):
http://www.sommelier-vins.com/article-2743074.html
http://www.sommelier-vins.com/article-2278687.html

They seem to advocate the need for a promotion of drinking per glass, not per bottle.

Mark Prevoo

The American pricing scheme only promotes more wine consumption if the average consumption with a constant per-ounce price is less than a bottle. When Frenchmen drink more, relatively cheap bottles could prevent them from drinking an extra glass above 75 cl.

Robin

Maybe they think the pricing will entice more people to come in and have a meal.

Ben

Perhaps it is done by law. I haven't been able to find any evidence for this, but if it is a patten common to French or Parisian restaurants it would be worth looking into.

As a related example, here in the UK there is a law which requires that liquor only be served in multiples of predesignated volumes (as a consumer protection against being shortchanged). The French may be the same way about wine prices.

David Wile

I'd guess competiveness. American restaurants would likely wind up the same if they had little to no waste by opening bottles for single glass pours.

John Wagner

What strucks me is that Americans tend to think that everything that differs from what they are doing must be inefficient. There are many more good restaurants in France than in the USA, so you could also argue that (potential) restaurant owners in the USA make mistakes by pushing their customers to drink as much as possible. There is not only the decision how much to drink, but also the decision to go to a restaurant.

Jon Stenning

Perhaps they believed that this was the revenue-maximising strategy? At an equivalent unit price, they will sell exactly as much wine as is demanded; maybe the owners feared that increasing the unit price for smaller volumes did more to discourage people from purchasing any wine at all than it did to encourage them to buy larger volumes.

V P Kochikar

The French restaurant may not necessarily be violating any laws of economics. Perhaps the waiter expects to visit your table and refill your glass from the bottle you've ordered. IN this case the restaurant isn't saving any effort from your buying the full bottle.

AG

Are you confused as to why the French restaurants don't offer a markdown for the full bottle as an incentive to order a bottle rather than a glass?

One guess is that American's don't want to feel like lushes and so only feel they should have a glass or two. So a restaurateur would be wise to charge more per glass to maximize revenues. Another possibility is that American's with their individualistic spirit desire different varietals and so order individually more often. So again, a restaurateur would be wise to charge more per glass to maximize revenues. And as a complement to the last point: it's generally thought that the French are more communally oriented so perhaps they order bottles more often, so charging the same price per-unit achieves revenue maximization.

Just a few ideas...

Ghost

Prices of things include more than just the unit cost to the buyer (here, the restaurant). The mark-up will include other factors, such as rent, labor costs, etc., and these other expense items will be incorporated into prices and passed along to the consumer.

A cup of coffee at location-x may be higher or lower than the same cup at location-y -- the price difference may have nothing to do with the product itself, it may include other expense items.

A steak at Outback is more expensive in Manhattan than the same menu item in an Outback in Utah, and the price differential is due to the higher operating costs in Manhattan, not because the steak is any different.

This is pretty basic economics and pricing.

AJS

One of the likely reasons that glasses are more expensive in America is spoilage. More wine sales=more turn over=no need to charge to compensate for spoilage.

Chris

My guess is that it is much easier for the consumer to be informed in France. Doing the mental math to compare the per unit prices of 15 to 50 to 75 centi-litres is much simpler than trying to do the math to compare 7.5 to 29.6 ounces.
When consumers are better informed, they are more demanding of a "fair" deal.

none

I'm guessing its a government regulation to "protect" consumers.

Steve

The post and some comments include an implicit if not explicit criticism of a different food and wine culture, a different society, and a different view of how to best market one's goods and services in that culture and society. I think it reflects a type of stereotypical American narrow mindedness. Not everything can be reduced to one view of "rational" economic self-interest and thank God for that.

David

This is how everything is priced in Europe. There is no discount for buying larger quantities. The 12 roll bathroom tissue costs exactly 3 times more than the 4 roll; a 250 gram tin of tuna costs exactly 2.5 times the 100 gram tin. Exactly -- to the penny. Every time for every product. I can't explain it.