The Impact of Wine Pricing Transparency

Posted by Tom Wark on Sep 11, 2006

Imagine walking into a bookstore and finding that novel you’ve been looking for. It’s right there on the New Releases hardback table. The inside flap, right there on the book, notes the cost is $25.99. You bring it up to check out counter and they inform you that the cost is actually $39.00.

Welcome to the wine industry…well, sort of.

Wineries don’t print their suggested retail prices directly on their bottles or labels. But they most certainly do have one. The suggested retail price of a wine can be found at the winery’s tasting room, at its website or by doing the math based on the price at which a winery sells their wine to a distributor. Distributors and wholesalers buy wine at 50% off suggested retail,  a price that allows them to mark it up to the retailers to whom they sell and allows the retailer to market it back up to suggested retail.

The dynamics of this dance are changing in the slightest way. Campo alla Sughera, an Italian winery in Bolgheri, has announced it will begin printing its suggested retail price right there on the bottle. (hat tip to Gerald at Weimax for point me to this bit of news).

This is pretty novel stuff. I’ve never seen a bottle of wine before that actually had the wineries suggested retail prices right there on the bottle. Campo alla Sughera explains their actions this way:

“The initiative by Campo alla Sughera
came out of the need to contrast the excessive price hikes for wines, a
bad habit that damages the image of producers and blocks fruition on
the part of consumers. Most probably, many restaurants and wine bars,
attentive to strategies for sales as well as for their clients, will
apply a price lower than that suggested on the label, and in this
case…”.

Restaurants simply don’t sell wine at the retail price. In fact, the price of a wine at a restaurant is often two to three times the suggested retail price. They justify this in any number of way. The issue of restaurant pricing rarely comes up  the restaurant. You look over the list, make your pick, and make your order.

That dynamic is going to change for the folk who purchase the Campo Alla Sughera bottles, isn’t it.  Imagine ordering that bottle of Campo, having the bottle brought to the table and finding the price on the bottle is two times less that the price on the menu. Restaurants are going to become a bit more skilled at explaining their pricing scheme.