We just returned from a highly enjoyable 2 weeks in southern California. Like many other British folks, we've developed a taste for many fine Californian wines back home in the UK, and were looking forward to some nice wines to accompany restaurant meals while in California. We were however completely shocked by the high prices on the menus.

How come it costs $25 to $30 plus tax for an "average" bottle of locally produced chardonnay or cabernet, when I can get the same bottle in a local restaurant in England for the equivalent of $15 to $20 (which presumably includes the shipping costs from US to UK)?

It's difficult to think of any other wine producing regions around the world where the local wine is so expensive at the point of sale. Just curious as to why this is the case...

It's easy Gordon. It's what the market will bear. American capitalism, simple as that. If people will pay it, the restaurants will charge it.

Correct.
An airline's overhead is no greater at Christmas or Thanksgiving, but that doesn't stop them from raising rates in order to take advantage of increased demand.
Same with the wine business.

Same with fresh fruits and veggies in the grocery stores here. My friend from back east can't believe how expensive the produce is here, even though it is grown right down the road!! High cost of living on the West Coast. Too bad it is not passed along to us farmers!!

Gordon,

The standard markup for wine in the U.S. (at least in California) in a restaurant is three times the wholesale value of the wine. Generally, cheaper wines are marked up more severely, whereas more expensive wines have less of a mark up. I don't know if the mark up is as steep in the UK. That may account for the difference in prices.

For special occasions when we want a great bottle of wine, we will bring our own bottle and pay the corkage fee which is usually $10 to $15. Sure beats the $80 - $100 mark up at the end of the evening.

Because they keep the really good stuff in state and ship the mediocre to the rest of us. The good stuff is more expensive.

We don't drink local wine. We overpay buying imported Italian. To offset it we overcharge you, tourists.

Good Question. I love traveling to France or Italy or anywhere in Europe because I can always get wine with dinner very inexpensivley. I used to live in CAlifornia and love California Chardonnays. The wine in CAlif is excellent. But, the high cost is due to high costs of doing business in California. High costs for insurance, TAXES, rent, utilities, advertising, and labor make it neccessary for California restaurants to raise there prices to try and make a profit somwhere. As soon as I moved from California to Georgia I started saving alot of money for the first time in my life because I paid considereably lower for wine & dinners in restaurants as well as less for gas, insurance, home utilities, groceries, clothes, traveling, golfing etc.. I prefer to visit Europe over California or Hawaii because you always get more for your money!

Interesting answers... but the high running costs explanation (though convenient for the restaurant owner) seems more of a red herring. I'd imagine that running a restaurant in, let's say, central Paris or Barcelona, is also an expensive proposition (and they pay their staff a decent wage). Yet, restaurants in these wine-producing regions seem to be capable of offering perfectly reasonably local wines for under $15 equivalent.

Might it be that wine drinking in Europe is considered more a part of everyday life (as opposed to something more likely to be kept for special occasions) and consumer pressure helps keep the prices down.

Gordon, do you know, for instance in the UK, how much the average restaurant marks up a bottle of wine? I'm curious if that would account for the difference. It is such common practice here in California that it has become acceptable to mark up a bottle of wine sometimes three times over the wholesale value. So that mediocore Chardonnay that you'll pay $10 for in the grocery store costs close to $30 in a restaurant. I don't seem to remember those kind of markups on wine in Italy.

Did you buy wines from anywhere other than restaurants? How did you feel the prices compared?

It works in reverse though also, Susan.
A couple years ago I remember reading that Santa Margherita Pinot Grigio (Tuscany) was the most poured wine in US restaurants that year. I'd seen it as high as $49 a bottle in some expensive restaurants.
We paid $5 a bottle for it that year in Tuscany.
Of course there are tariff issues, etc, but that's a total of almost 1200% markup over cost!

Say what you will, the costs of just opening the doors in California are among the highest in the world. Taxes, insurance costs, and labor costs are major, and of course, we are all paying exhorbitant electricity rates thanks in part to a botched job by our Gov.
Recently a study was released indicating that California was named as the least attractive state to locate a business by business leaders across the country. Insurance costs and regulations were named the primary culprits.
One of the earlier responses, though, hit it right on. If people pay the price, why not charge it.

I happen to also live in California, but I do notice that many of the middle of road wines are comming down on the prices (in places other than resturants - they are still to high) due to a glut in the wine industry (I do know this because my husband works for a winery & I work for a grapevine nursery!) We are lucky in that we happen to get an employee discount on the wines from my husband's company (lets just say it is a major winery in California) so the price in very resonable. We usually take a bottle with us to a resturant and just pay the $5 to $10 corking fee - or I order a glass of wine if hubby is getting a beer.