Photo: Daniel HamermeshIn 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.
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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.
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.
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.
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.
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.
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…
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.
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.