Leading Restaurant Wine Supplier Offers Guidelines on Wine Price Markups

The days when Philippines’ upscale restaurants could get away with slapping a 100, 200 or in the case of 5-star hotels and a handful of fine-dining restaurants in Makati, 300% markup on wines are long gone. Ask any restaurant and bars in any international hotel in Manila, Cebu and other major city in the Philippines how their wine sales are doing and chances are the answer would be either not so good or only the cheapest bottles are moving.

So why is high markup no longer viable?

There are probably many reasons but if one were to list the top three, then these would probably be

(1) The internet has raised consumers’ price-awareness to an all-time high. Handheld devices empower customers to check prices of wine even during dinner at a restaurant anywhere in Manila. It is practically impossible to hide large markup anymore.

(2) Increased competition among restaurants especially in Manila has driven prices of wine (and food) down. Again, the Internet makes it easy for customers to compare prices among their favorite dining establishments and wine bars in Metro Manila. High markup sticks out like a sore thumb.

(3) Wine drinkers in the Philippines have easy access to wines. There are more wine shops and more wine suppliers around Manila than before. Many customers are bringing their own bottle of wine into their favorite restaurants. Fear of losing regular customers have caused many restaurants in Manila often waive wine corkage charges for their regular customers. Realizing that corkage fee is no longer an effective deterrent to the BYOB (Bring Your Own Bottle) trend, restaurants have no choice but to reduce their markup to reduce or eliminate incentives for customers to take the trouble of bringing their own bottle of wine.

Wine Price Markup Policy of the Modern Restaurant in Manila

Markup policies for modern successful restaurants tend to be derived from one of two strategies:

(1) A fixed markup that is slightly above its corkage fee. For example if the corkage fee charged by a restaurant in Makati is php500 per bottle, then this restaurant will probably implement a fixed markup of say, php800 per bottle. This restaurant hopes that the premium of php300 is a small price to pay for the convenience of ordering from the restaurant wine list rather than to take the trouble to pick up a bottle from a wine shop in Manila and bring it to this Makati restaurant and pay the corkage charge.

(2) A percentage markup is applied instead of adding a fixed amount to the purchase cost of wine. This is the traditional markup strategy but it has to be toned down considerably for restaurants in Manila to stay competitive. Although there are restaurants that still slap a whopping 100% markup, the trend is to go nearer to the 50% mark instead.

Rationale behind a lower markup policy

Old-school restaurant owners often see this as a big problem, but progressive restaurateurs see this as a golden opportunity for them to create a competitive edge through an aggressive and well-planned wine policy.

20 years ago wine drinkers in Philippines are few and far in between. Restaurants in the Philippines do not regard wine as a volume market. They expected only a small percentage of their customers to order wine and these customers were none other than the super rich, the kind of customers that do not really care about prices. Of course, those days are long gone. Today the wine scene in the Philippines is much more vibrant. Bottles of wine grace almost all the tables in upscale restaurants in Makati, BGC, Ortigas and Rockwell. What this phenomenon presents to astute restaurant owners and wine bar operators is a unique opportunity to go for numbers instead of milking as much profits as possible from a small handful of high-spending customers.

Seeing how successful a volume strategy can make a restaurant like some of the fast-food and sit-down restaurant chains around the Philippines, the same ideas can be applied to developing a winning strategy for mid- to high-end restaurants in Manila. An aggressive wine policy can bring in most customers for these restaurants in Manila. What is lost in terms of profit margin for each bottle of wine is made up many folds by the surge not only in the number of bottles of wine sold and the quality of those bottles ordered by these customers but also the increase in traffic through the restaurant.

For many years, restaurants in the Philippines got by without paying much attention to the wine portion of their business. The more progressive restaurant owners in Manila are starting to see this as an excellent opportunity to achieve growth. The only question for them is how to go about establishing a sustainable wine business in their restaurants. One of Philippines’ leading wine suppliers, Yats Wine Cellars has the answer. A special offering was recently unveiled by this wine supplier designed to help these restaurants go to the next level with their wine sales.

In 2013, YATS WINE CELLARS developed a program that will help restaurants to develop a wine concept that will ultimately result in gaining a competitive edge in today’s wine-and-dine market. To find out more about the wine concept development program offered by this leading restaurant wine supplier in the Philippines, log on to

http://www.yatswinecellars.com/home.php/develop-a-winning-wine-concept-for-your-restaurant-in-manila/

Restaurateurs who are interested to know more about this wine program development program should contact this wine supplier:

Yats Wine Cellars
Manila Sales Office
3003C East Tower, Phil Stock Exchange Center,
Exchange Road, Ortigas Center, Pasig,
Metro Manila, Philippines 1605
Tel: (632) 637-5019 0917-520-4393 0926-686-5955
Ask for Rea

Or click here to inform Yats Wine Cellars of your interest to explore this wine concept development program in greater details.

Yats Wine Cellars is one of the wine suppliers that devote a great deal of attention and effort to wine education aimed at enabling wine lovers to enhance their knowledge of wine as well as to develop a discerning palate for fine wines. To that end this leading wine supplier in Philippines frequently hold public wine events that are not sponsored by wine producers and not intended to promote a certain brand.

FACEBOOK: The Facebook account of Yats Wine Cellars, called Yats.Wine is a media with which the professionals at Yats as well as fellow wine professionals in the trade throughout the world will share with our friends and wine hobbyists in the Philippines knowledge, findings, experiences, tasting notes, insights and opinions about wine, food-wine pairing and news about wine.

Click here to sign up to be a friend of Yats Wine Cellars to keep abreast of what’s happening in the wine scene in Philippines.

Yats Wine Cellars started opening small boutique-sized convenience wine shops in major locations of Manila. Through these wine outlets in Manila, Yats Wine Cellars hope to bring interesting selections of fine vintage wines to wine lovers in Manila at attractive prices.

Please click here for information about the wine outlet shops of Yats Wine Cellars in Manila and Pampanga, Philippines.