DA’s Blind-eye to Wine Extortion not Getting my Vote

Not that it matters, but the DA ain’t getting my vote at this year’s elections. And the reason is that the party permits extortionary practices to persist in the hospitality trade. You know, the eating, drinking, hoteling, tourist thing that is the goose that brings the golden eggs to the Western Cape. And it is here, in the Cape, where restaurants are allowed to continue screwing wine-farms and customers through the bribery that is the wine-listing fee.

For the uninitiated, a listing fee is an amount of money the restaurant deems fit to charge a winery for the winery’s privilege of seeing one or more of its offerings appearing on that specific restaurant’s wine-list. So instead of eloquently and strategically marketing one’s wine as a potential complement to the restaurant’s culinary offering, as well as to the eatery’s general individual ambience, all the winery’s marketer has to do is hand over a wad of cash and bingo, your wine is accepted for re-selling by the dining establishment.

Annual amounts may vary from R3 000 to R26 000 charged to get your wine onto the restaurant list.

Now I am no enemy of free-market capitalist business practices. But that a growing number of restaurants here in the Western Cape are partaking in this mild extortion leaves a bad taste. The main reason for this is that wine is already a healthy and easy contributor to an eatery’s bottom-line. So why squeeze the producer even more?

Restaurants will buy at a 30% trade discount. This means the bottle of Chateau RippedOff you and I pay R100 for in retail will be sold to the restaurant for R70. But if you think said establishment is going to charge us R100 to enjoy the wine at the table and be happy with a 30% profit, cloud cuckoo is waiting. For said restaurant will place a substantial mark-up on the price at which the wine was bought. Think 300% to 500% on trade price.

This means by the time it appears on the wine-list, Chateau RippedOff will carry a tag of between R210 to R350. Minus R70 from those two sums, and the restaurant is sitting with a substantial return.

What makes this profit tastier is that wine is an easy part of the restaurant value-chain. It does not have to be cooked to perfection and sauced by a trained chef. It does not need a uniform, nor does it require the paying of UIF benefits and taxi-fare. The wine only has to be stored and poured, in return giving love, pleasure and profit.

Which begs the question: why, with the restaurant already gaining a happy profit from the reselling of wine, do certain elements in the sector see the need to bump-up the wine-related income by slapping on an added listing fee?

If blatant greed is not the answer, then I do not know the difference between a steak tartare and a Beef Wellington.

….well, some of them.

The other nasty issue with a restaurant relying on a pay-for-play wine-list, is that the diner is blissfully unaware of this sleazy underhandedness. Many of us frequent a restaurant assuming the same amount of care and the same spirit of hospitality that goes into the food preparation and the service will apply to the selecting of the wine-list. Chardonnay from limestone soils to accompany the seafood dishes. Elegant Cabernet Sauvignons to partner the accurately grilled beef. Bright cool-climate Sauvignon Blanc for those spicy Asian dishes. Wine and food offered with an holistic approach towards customer satisfaction, one would expect.

When the restaurant relies on listing-fees, it displays a crude disrespect to its culinary offering by using money as the sole criteria for making its wine selection. Lack of respect for the diner, coupled with ignorance. Not exactly conducive to adding integrity to your hospitality offering, is it?

Of course, as long as wineries are willing to fall for this scam, it will go ahead unabated. The only party that can have a say is the customer. And for this, the wined-and-dined foodie media have a role to play by alerting the public to restaurants entertaining unethical wine-lists. Restaurant guides such as Eat Out should, along with a restaurant’s wheel-chair friendly status and the offering of vegan options, state whether the establishments listed play the listing-fee game.

Those provincial bodies who oversee the hospitality industry should force guilty restaurants to blatantly state – on the wine-list – that this list is based on wineries who have paid to see their products offered for sale, and that the selection was not the personal choice of the restaurant and is about as democratic as a parliamentary election in Rwanda.

Hence my unwillingness to support the Western Cape’s ruling party. If they turn a blind eye to this obvious extortion on the door-step of the province’s best-known industry, how to trust them further down the line? I would have expected the DA to show a better example.

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7 thoughts on “DA’s Blind-eye to Wine Extortion not Getting my Vote

  1. Hello Emile.

    I agree that this total ripoff practiced by the restaurants is totally unacceptable and needs to be stopped.
    What I do not understand is how you can blame the DA for this practice. I have not noticed any improvement in the situation where the DA is not in power.
    When I dabbled in the restaurant trade many years ago this practice was started by large wine conglomerates to effectively ensure that they bought the lions share of entries on the wine lists of restaurants.
    I agree this needs to be stopped and I look forward to your suggestions as to what can be done to legally and effectively stop this practice in a free market environment.
    Another practice to investigate is the costs and implications for a smaller supplier being listed as a supplier to the retail chains.

  2. Name them and shame them – you may be surprised by how many restaurants are actively involved – umbrellas, TVs, building renovations, menu printing, waiters uniforms, signage, fridges and so on and so on! Oh and don’t think the big ex beer companies don’t have a roll to play on this. They call it co-branding!

  3. Your words regarding the iniquities of the restaurant trade has much merit.
    Can the DA be the sole facilitator or condoner of this practice?
    The operator has the power to embrace ethical practices which ensure a more even playing field. Mega distributors have the tools to make it onto wine-lists without the need for listing fees.
    The incentives you describe are a major enticement and said distributors have budget allocated.
    You stir the pot regarding mark-ups which is another bone of contention for diners and is low hanging fruit for obvious reasons.
    That said,It is easy to lambast operators for taking the easy money HOWEVER in my humble opinion the real culprits are landlords with extortionate rentals and a governance that is a maze of hoops and puddles to navigate.
    If we were to look at the value chain, the producers are getting reamed and the patron is being conned with mediocre wines and over priced products.
    No producers and no patrons means the whole industry is doomed to wither away. Overseas visitors cannot sustain the trade and local consumers need encouragement to spend their hard earned Rands.
    Always a thought provoking read Emile!

    1. Thank you Trevor. The DA leads the Western Cape, headquarters of wine and hospitality and tourism in SA. I would thus expect of them to set an example by walking the talk of good governance and clamping down on steps that are unethical and untasty in these important industries.

  4. This has got nothing to do with the DA. Do you want Government to regulate every transaction between a buyer and a seller – matches, T shirts, ice creams on a hot day, fish at Kalk Bay?

    Blaming this on the DA is nothing but Sour Grapes.

  5. The heading to your article is most inappropriate. You are pointing out a problem, but blaming the wrong party (excuse the pun). Why not take your product, if it is good, somewhere else ?

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