Just got back from a trip to France and enjoyed this at a restaurain Dijon for €150 a bottle. Went back to check my Kermit offering and saw this at $350 USD. The wine was wonderful. I don’t understand how a restaurant can offer this for so much less than US retail, lest alone their importer? Are we just getting absolutely hosed here?
by tweeddeluxe59
15 Comments
Everyday we yearn for r/winecirclejerk
It’s a completely different market. Not surprised at all.
Most restaurants in France don’t mark up their wine like restaurants in the US do. Also, there’s 3 levels of distribution in the US (importer > distributor > retail). KL just jacks up the price of anything with demand and so the retailers have to charge more. We were able to find a bottle of 06 Rayas in France for 600 euro on a list; that bottle in the US on a list would be around $2500. Prices are crazy here!
Mark-ups in many countries dont rip you off like in the US. It seems funny to me that people in the US are just ok with over paying for goods. Its like with cars, most dealerships in the US have an adjustment to the MSRP, like what??? I walk into the dealership in Europe and pay MSRP or under. In France, Spain Italy wines are rarely marked up more than 100% of retail.
A reason I buy at least a case of wine on my European trips.
I’ve seen wine merchants discussing prices at vinyards in France. At quantities over 1000 bottles, they were offered about 1/6th of the retail price at the vinyard store.
The US is just insanely expensive, there is no other explanation.
Let’s say that the bottle costs €50 (ex cellar (that is departing from the cellar, ex VAT and any logistics)), that’s $57. Kermit Lynch needs to add around $0.40 in duties and taxes, and around $4-6 in if they use container freight. With the new Donnie tariff, you’ll have to add another 15% to that (so that’s another $8.55). So to get that same bottle on US soil in a importer’s warehouse, you’ll pay $71 before VAT.
In Europe, that $57 bottle costs about $0.30-0.50 to get it pallet shipped to any warehouse in Western Europe. You’ll have to pay accise duties, depending on the country. In France that is €0, in the Netherlands that is about $0.77 a bottle. In Scandinavian countries that is significantly higher. Let’s take the Netherlands, so then a bottle in an importer’s warehouse, ready to sell costs $58.17.
That is a price difference that is not insignificant (mainly driven by the recently introduced tariff btw), but it doesn’t explain the difference in selling price in retail:
Markup importer (30-50%): $28.4
Markup retailer on the price charged from importer (30-50%): $39.76
VAT (avg 7%): $9.74
= $150 retail price normally, while you paid $350
In my experience, markups for the middlemen in Europe are quite a bit lower (as a % even). Markups from ex cellar prices in hospitality range from much lower (Italy (1.5-3x), to very reasonable (France 2-4x, which matches what you paid), to simply so insane that you’ll only find shite wines on wine lists (Nerherlands, 8-12x). Depends on proximity, culture, business setups, cost drivers and other things.
Anyway, based on the above your wine should be about 22% more expensive than in Europe, but at the end of the day that leaves us with a gap of $200(!) retail value that is unexplainable. Which leads me to the conclusion that everyone just made it very expensive in the US, because one apparently can and why not make an amazing margin then?
Now that the importer is also the retailer in your case, it is in the importer’s interests to keep prices high, to offer retailers and hospitality the opportunity to build in really good margins. This, in my view, is why the wine market is ready to be disrupted, I never understood why these price gaps exist in a digitized market, only to send some sales reps down the road and organize some tastings, the added value of an importer is very limited imo – and rapidly shrinking. I know many people tried, but there should be some sort of an ecom / platform-like businessmodel one day, where any middlemen can be simply the 3PL, in countries like yours there is enough margin to divide, it’s just that there are all these exclusivity deals you cannot work around, which is the only reason importers still exist.
Which smells like a cartel, it’s just that the market is super scattered. But it’s a public secret that there are a lot of backroom deals between (the more commercial) wineries and importers that are a bit in the grey zone when it comes to (at least European) competition law.
As a private buyer, you can also just find a webshop in Europe that is willing to ship to the US. That is increasingly difficult and costly given your new president, but you have quite some margin to cover the logistics with. I would do that if I were you, just send them an e-mail if they do not offer US shipping on their website.
The other thing not mentioned said far is restaurants in France are given allocation of these rare/coveted bottled on the condition of not ratcheting up the price and only selling to drink in the restaurant.
A quick google search as a Dutchman currently in Italy gives the impression that you got a great deal in the restaurant. Can’t find it here for much less than €300 (except for a few sites claiming selling it for €/$ 150, but upon clicking the bottles aren’t in stock anymore).
I’m actualy at times quite surprised by the lack of mark up on bottles in the U.S. Sometimes they even go for less than here.
Kermit markup is brutal.
But $350 – $400 is the market price on Rav. It’s not like you can get it retail in France for 150e.
Certain restaurants, particularly ones that have bought for many years, have allocation pricing that is way below market.
Like finding Overnoy for 200e at some bistro. But they won’t sell it to you to go and no retail shop has that price.
tariffs 😉
America sucks, you haven’t noticed yet?
KL is particularly rapacious in his pricing. He has sought-after domaines, but still, he goes too far. If his clients voted with their feet, things might change. But they won’t, so the rapacity will continue.
It will only get worse with the tariffs I’m afraid.
Tarifs baby…