Average Profit Margin on Wine in Catering
Wine is a significant revenue driver for most caterers. The margins tend to be healthier than on food, but there are pitfalls too. How do you set a selling price that appeals to clients while still leaving enough room to make it worthwhile? And what actually determines how much you earn on a bottle?
Wine margins: what to expect
Most hospitality businesses work with a markup of 2.5 to 4 times the purchase price of wine. That translates to a beverage cost of roughly 25 to 35 per cent. In other words, for every pound or euro a client pays for a bottle, 25 to 35 pence goes towards what you paid for it.
The margins vary considerably by price point. On cheaper wines (purchase price £4 to £8 a bottle) caterers typically apply higher multipliers, sometimes 3.5 to 4 times. On pricier bottles (£25 and above) the markup is usually kept lower, because a very high selling price starts to deter buyers. Buying a bottle at £30 and selling it for £120 does not work in most event contexts.
Realistic wine margins for caterers
For caterers, the dynamics are slightly different from a restaurant. You set the price in a quote rather than on a menu, which gives you more flexibility but fewer reference points for the client. Common working benchmarks:
- House wine (purchase price £4 to £6): selling price £14 to £22 per bottle
- Mid-range wine (purchase price £8 to £12): selling price £24 to £38 per bottle
- Premium wine (purchase price £15 to £25): selling price £38 to £65 per bottle
Note that VAT on alcohol in the UK is charged at the standard rate of 20 per cent. Always be clear in your quotes whether prices are inclusive or exclusive of VAT.
How to calculate the right selling price for wine
The most commonly used method is cost-plus pricing. Take your purchase price and multiply it by a factor large enough to cover transport, storage, staffing and your margin. A straightforward starting point: purchase price x 3 = selling price excluding VAT.
Once you have a figure, check whether it makes sense for the type of event and the client. For an informal garden party with house wine, a factor of 3 works well. For a formal corporate dinner with premium bottles, you can go higher, but the wine needs to justify the price in quality and presentation.
Also factor in wastage. Corks, breakages, leftover bottles at the end of the night. On larger events it is worth building in a small buffer to avoid eating into your margin.
Factors that affect your wine margin
Beyond purchase and selling price, several other factors influence what you actually make on wine:
- Service style: selling wine by the glass gives a higher yield per litre but requires more staff and careful pouring.
- Event type: clients at a corporate dinner will pay more for quality wine than guests at a birthday buffet.
- Location: off-site events add transport costs and sometimes refrigeration costs.
- Season: summer events with large volumes require different buying patterns than a winter dinner for fifty.
- Supplier relationship: a solid relationship with a wine wholesaler can unlock volume discounts and access to exclusive ranges.
How to optimise your wine buying for better margins
What you pay at purchase has the biggest single effect on your final margin. A few approaches that work well in practice:
- Buy by the case or pallet rather than individual bottles. Volume almost always brings a better unit price.
- Work with a regular wine supplier and negotiate on annual volume. A commitment to buying a certain amount each year usually translates to better pricing.
- Buy seasonally when possible. Some wines are cheaper when purchased well in advance.
- Build a short, fixed wine list for each event type rather than sourcing something new every time. Fewer options means better buying and less admin.
- Track consumption per event. After a few jobs you will have a much better idea of how much to order, which reduces waste.
Frequently asked questions
What VAT rate applies to wine in catering?
In the UK, wine and other alcoholic drinks are subject to the standard VAT rate of 20 per cent. This applies whether you are selling by the bottle or per person. Non-alcoholic drinks such as soft drinks and water are zero-rated. Always specify in your quotes whether your prices include or exclude VAT to avoid confusion with clients.
Is it better to charge for wine by the glass or by the bottle?
It depends on the event and the client. Charging by the glass generates more revenue per litre but requires accurate pouring and more attentive staff. Charging by the bottle is simpler to manage and more transparent for the client. Bottle pricing works well at formal dinners; per-person pricing is more common at buffets and receptions.
What is a good wine margin for a caterer?
A common benchmark is a beverage cost of 25 to 35 per cent. That means your purchase price represents 25 to 35 per cent of the selling price. On less expensive wines you tend to sit towards the lower end of that range; on premium bottles, towards the higher end.
Do I need a licence to sell wine at events?
In the UK you generally need a premises licence or a temporary event notice to sell alcohol at an event. The rules vary depending on whether the event is on your own premises, at a client's venue, or in a public space. Always check with your local licensing authority and make sure your insurance covers alcohol service.
How do I record wine sales correctly in my bookkeeping?
List drinks separately on every quote and invoice, with the correct VAT rate applied (20% for alcohol, 0% for soft drinks and water in the UK). Keep your purchase invoices so you can compare buying costs against revenue. Tracking what you buy versus what is actually consumed per event will help you price and plan better over time.
With Catermonkey you track your drinks revenue and margins in the same tool as your quotes, giving you a clear picture of what you earn on every event.
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