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Hospitality venues are always looking for ways to improve their processes and their profitability. One way to do so is by charging corkage fees. If you want to allow customers to bring their own bottle, this option could be for you, but there are a few things to consider before you make a change. Here’s a quick guide to what you need to know about corkage fees.
What is a corkage fee?
A corkage fee is a fee charged to a customer for consuming their own beverages on a venue’s premises, otherwise known as BYOB. Corkage fees are generally associated with wine, largely because wine is the beverage most commonly drunk with a meal. Corkage fees can also be charged on long drinks (e.g. beers and ciders), spirits and even soft drinks.
The law and corkage fees
In the UK, you need a licence to serve alcohol that is consumed on the premises. You do not need a licence to sell alcohol that is consumed elsewhere. Similarly, you do not need a licence to allow people on your premises to consume alcohol that they have bought elsewhere. It is entirely legal to charge corkage fees as long as the charges are transparent.
Why do businesses charge a corkage fee?
The primary reason businesses charge corkage fees is to recoup the costs associated with serving the alcohol. Some businesses may also charge a corkage fee to offset lost bar profits.
Despite the name, a corkage fee does not just cover the waiter’s time uncorking the wine. It also covers the costs associated with pouring it and washing up the glassware afterwards. In some cases, it also covers the cost of bringing the wine to the right temperature. Realistically, a portion of it is also going to need to cover the occasional, but inevitable, breakages.
If a venue has an alcohol licence, a corkage fee also helps to cover lost revenue from in-house alcohol sales. This cost still needs to be paid even if it’s only used by a limited number of patrons. Fine-dining restaurants in particular often invest heavily in curating wine lists and hiring and training specialised bar staff.
What is the average corkage fee?
In the UK, corkage fees are generally charged per bottle opened on site. They may differ according to the type of alcohol. Currently, the average BYOB corkage charge is around £12–£15 for still wine, £15–£20 for regular sparkling wine (e.g. Cava or Prosecco) and £20–£35 for champagne.
There is quite a bit of variation. In some venues, the corkage fee can be as little as £3–£5 per bottle or as high as £45–£65. As a rule of thumb, the higher a venue’s prices in general, the higher its corkage fee.
What type of venues typically charge a corkage fee?
The only venues that charge corkage fees are venues that allow customers to bring their own alcohol. In the UK, this means event venues, fine-dining restaurants and casual restaurants without an alcohol licence.
Should your business charge a corkage fee?
If you sell alcohol, allowing BYOB creates competition for your in-house sales, so it makes sense either not to allow customers to bring their own alcohol or to charge a corkage fee. If your venue is an event destination, you can split the difference. For example, allowing BYOB for groups over a certain size and by prior arrangement, and then making the decision on corkage fees outside of this on a case-by-case basis.
If you don’t sell alcohol but plan to do so, allowing unrestricted BYOB may create problems for the future. As the old saying goes, you can turn a no into a yes, but not a yes into a no. If you’re committed to selling alcohol on-site, then assess the issue of corkage as though you already were.
If you don’t sell alcohol and don’t plan to, still think carefully about the potential impact of allowing customers to drink on your premises. Will it actually help to attract more customers? Will they be the sort of customers in your target market? How would you feel about handling customers who’d had a bit too much? What about turnover levels?
Though you wouldn’t technically be losing revenue from in-house alcohol sales, it can still make sense to charge a corkage fee. This can help encourage customers to keep their drinking moderate. If you later decide that it isn’t really necessary, you can always remove it.
How to calculate a corkage fee
Ideally, you should set a corkage fee at a level that reflects the impact BYOB has on your business. However, you may not know accurately what that impact will be until you try it. If you already sell alcohol, then calculate your average markup on alcohol and set your corkage fee at that. If you don’t, research your competition and use that to inform your corkage fee. In either case, be prepared to adjust it as necessary.
Corkage fee FAQs
What does BYOB mean?
BYOB stands for ‘Bring Your Own Bottle’ or ‘Bring Your Own Booze’. It often applies to at-home events, but more recently, businesses have adopted the trend to allow customers to drink their own alcoholic drinks on their premises. It’s a win-win; customers get to choose and buy their own wine (or spirits), while the venue can forgo a licence and charge a corkage fee that covers the cost of opening and serving the bottle using their glassware.
Do you need a license for BYOB?
If you’re allowing customers to drink their own alcohol on your premises but aren’t selling it yourself, then you don’t need a licence. An alcohol licence is only needed in the UK for venues selling drinks directly to the public. Similarly, you don’t need a licence to implement corkage fees. As long as the fees are transparent, it’s legal to charge corkage alongside your BYOB policy.
Can a customer refuse to pay corkage?
If you clearly tell your customers there’s a corkage fee for bringing their own bottle, then they have to pay up. However, this is where you might want to also consider serving alcohol so that your customers can choose between the cost of corkage vs. a bottle from your menu. Some venues even scrap the corkage fee on quieter days to encourage more bums on seats.
