Corkage fees are a longstanding concept in restaurants with a bit of a misunderstood stigma surrounding them. While those who know their value tend to prioritize restaurants with a solid cork policy, to those who are unaware, they’re simply confusing. And that’s fair — after all, without a bit of background, it’s hard to understand.
What is a Corkage Fee?
Beyond being a way to make a bit more money, restaurants actually have a great reason to charge a corkage fee — licensing.
Definition of a Corkage Fee
A corkage fee is a fee charged by a restaurant to allow guests to bring their own wine. While some restaurants may make exceptions for beer or other spirits, wine is generally the aim. By now, you’re certainly asking why — and that’s a great question! The simple truth is that corkage fees are used to get around liquor licensing.
The Origin of Corkage Fees
While the origins of the term corkage fee has a long history dating back to the 18th century, in modern times, they have a far more simple explanation. In times long past, French wedding and party caterers often doubled as wine merchants. When they’d wrap up catering an event, they’d walk the premises counting corks; when finished, their final count would allow them to charge guests for wine sold. Nowadays, though, we have a far more simple excuse for corkage fees.
In most parts of the world, it’s illegal to sell alcohol without a liquor license. These licenses are expensive and require a good bit of work to attain, meaning restaurants need to charge for drinks to make up for that cost. But if a guest brings their own wine to save a bit of money, that ends up costing the restaurant. To make up for this and cover the cost of glassware and labor to open and pour wine, restaurants charge a corkage fee.
Why Do Restaurants Charge a Corkage Fee?
While we’ve already covered the basics, it feels only right to break down exactly what costs a corkage fee can incur.
Compensating for Lost Beverage Sales
Beyond the privilege of guests being allowed to bring their own wine, there’s one extremely practical reason for a corkage fee — beverage sales. Or, more accurately, the loss of beverage sales. Most bars and restaurants charge a premium for alcohol (often aiming for a 200-300% markup). When guests bring their own alcohol, that means that they aren’t buying drinks that they likely would have otherwise. So, how do we make up for that loss? A corkage fee!
Covering Service and Glassware Costs
Another great reason to consider corkage fees is the cost that you pay for glassware and labor. While the prices are ultimately minimal, they are costs that you’re incurring. Whereas the cost of service is wrapped into the price of a glass of wine, it’s not when guests bring their own. By charging a corkage fee, you cover the cost of glassware and labor in one fell swoop.
How Does a Corkage Fee Work in Restaurants?
Typical Corkage Fee Ranges
The cost of a typical corkage fee varies greatly based on the restaurant and its location. A fine dining establishment in the heart of Manhattan, for example, would likely charge a minimum of $40, ranging up to (or beyond) $100. In contrast, bistros and other restaurants elsewhere will likely charge somewhere under $40.
Put simply, the price depends on the cost of an average service. If you expect to charge upwards of $200 for a table of two, then a $40 corkage fee seems rather reasonable. In contrast, for a two-person meal under $100, anything over $20 is likely to raise some eyebrows.
Common Policies for Applying Corkage Fees
While there aren’t any hard-and-fast rules surrounding corkage fees, there are a few guidelines that you should familiarize yourself with. As seen above, corkage fees are less of a science than we’d like. The simple truth is that when setting corkage fees, you should think about cost. More accurately, ask yourself:
- How much is my most expensive bottle of wine? What about my least expensive?
- How much will guests spend here on average?
- Do I provide full table service, counter service, or somewhere in between?
- Am I able to decant wine and provide the full nine, or am I just pouring and uncorking the bottle?
Each of these questions helps narrow down how much you should charge. The first and second questions can help you place guests within a range of prices that they might have spent on wine otherwise. If you have extremely expensive bottles available, a more expensive corkage fee may be fitting. On the other hand, if your most expensive bottle is under $80-100 (retail), then a lower fee is likely deserved.
The third and fourth questions help place a value on your service. In other words, a full-service fine dining restaurant that decants wine for guests can charge far more for a corkage fee than a casual bistro or counter service restaurant.
Should Your Restaurant Charge a Corkage Fee?
Deciding whether or not you should charge a corkage fee is a difficult question. They don’t fit every business, and not all guests will be willing to pay one.
Benefits of Charging a Corkage Fee
At this point, we’ve discussed the benefits of a corkage fee. They allow you to make a bit of extra money while allowing guests to bring their own drinks. This allows them to enjoy wine that they know that they’ll enjoy, save a bit of money on their end, and generally enjoy their meal just that much more. And on your end, you don’t need to worry about wine pairings, tastings, and the process of finding guests a suitable wine.
Potential Drawbacks of Charging a Corkage Fee
If your restaurant isn’t expensive to some extent, your guests may feel put off by a corkage fee. While they’re not uncommon, some people may see it as paying the price of a bottle of wine for the privilege of bringing it (after buying it already) to your restaurant.
Tips for Setting a Corkage Fee at Your Restaurant
Researching Local Market Rates
Before you go about setting a corkage fee, it’s crucial that you look at other restaurants in your area. A bit of market research allows you to find the price floor and ceiling for corkage fees and, importantly, see how common they are around you. If they’re incredibly uncommon, you may find that it’s more work than it’s worth to try and explain and push corkage fees. In contrast, if they’re everywhere, you know that they’re popular enough in your area to pursue.
Once you’ve learned how common corkage fees are, you can go about setting your price. Try to find a middle ground between the highest and lowest corkage fees in your area. This will allow you to test it out and, if needed, adjust up or down accordingly.
Communicating the Fee Clearly to Guests
Once you’ve set a corkage fee, it’s important to coach your staff on how to explain the fee to guests. Whether or not they’re familiar with the concept, it’s crucial to communicate why you charge the fee (to make up for the cost of service and save them money) and answer any questions accordingly. Once guests are familiar with how and why corkage fees work, they tend to be a bit more receptive.
Corkage Fee FAQs
With all of that out of the way, let’s answer a few common questions surrounding corkage fees.
Is Corkage Fee the Same as a Corking Fee?
Yes! Corking fees and corkage fees are different names for the same concept. Both allow guests to bring their own wine to enjoy with their meal in a restaurant.
Can Customers Negotiate Corkage Fees?
No, customers can’t negotiate corkage fees. While many will certainly try, restaurants are not a farmer’s market. The prices are set where they are, and they are final. If guests really push trying to negotiate, it’s generally best to offer them a cocktail menu or wine list and move on. Corkage fees allow guests to bring their own wine, yes, but they also let restaurants serve that wine legally — so they’re non-negotiable.
Are Corkage Fees Legal Everywhere?
No, corkage fees are not legal everywhere. While this varies greatly by location, generally areas with laws against “Bring Your Own Booze” (BYOB), will prohibit the sales of liquor or wine via corkage fees.
Additionally, some areas (namely California in the U.S.) have limited the maximum price of corkage fees. In the case of California, corkage fees are limited to $10 per bottle.
Finally, as always, businesses without a liquor license cannot use corkage fees to get around selling wine without a license.
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