Small businesses that serve food and drink need various licences, especially if they want to sell alcohol to be consumed on the premises. But not all alcohol drunk at venues needs to have been bought there. Some venues might be BYOB (bring your own booze), and that’s where corkage fees come in.
If you’ve never charged corkage fees before and want to know more about whether you should be or not, we’ve compiled this guide to corkage fees in the UK for small businesses, including:
- What are corkage fees?
- How much are corkage fees?
- Here’s everything you need to know.
What are Corkage Fees UK?
So, what is a corkage fee? Restaurants or other establishments may charge corkage fees to customers who bring their own wine or alcoholic beverages to consume on the premises. These fees typically cover the cost of services such as opening, pouring, and serving the wine, as well as the use of glassware and other necessary resources.
The amount of the corkage fee varies widely and can range from a small fee to a significant amount per bottle. Some establishments may have restrictions on which types of beverages are allowed or only permit corkage for specific events or occasions.
In the UK, a licence is required to serve alcohol for on-premises consumption. However, a licence is not needed to sell alcohol intended for consumption elsewhere, nor is it required to permit customers to consume alcohol purchased elsewhere on the premises. It is legal to charge corkage fees, as long as the fees are made transparent to customers.
They tend to refer to wine, hence the corkage fees meaning, which relates to the fee required to physically uncork a bottle. However, they can also be charged for beers, ciders, spirits and even soft drinks.
What is the corkage fee for?
Businesses charge corkage fees primarily to recover the costs associated with serving alcohol, such as pouring, washing glassware, and bringing the wine to the appropriate temperature.
Why do businesses charge corkage fees?
Some establishments may charge a corkage fee to compensate for lost profits from in-house alcohol sales, especially if they have an alcohol licence. Fine-dining restaurants, in particular, invest significant resources in developing wine lists and training staff.
The fee can discourage customers from lingering too long at restaurant tables, as consuming alcohol can slow down both eating and dining turnover. When determining in-house prices and corkage fees, the potential impact of alcohol consumption on dining time must also be considered.
The difference between BYOB and corkage
Corkage and corkage fees are technically terms used exclusively by bars and restaurants with established and formal wine or alcohol services. Although customers provide their own alcohol, the restaurant still takes responsibility for the entire wine service, including chilling the bottle, presenting it, opening it, providing tastes, aerating it, pouring it, and more.
BYOB (Bring Your Own Beer) or BYOW (Bring Your Own Wine) are slightly different to formal corkage and corkage fees. Casual restaurants without formal wine or alcohol services often use BYOB or BYOW acronyms. In these cases, customers bring their own alcohol, which may or may not be opened and poured by a server. Typically, a small fee is charged for this service.
Allowing customers to bring their own alcohol can create competition for your in-house sales, so it may be wise to either not permit it or charge a corkage fee. However, if your venue is an event destination, you can compromise by allowing BYOB for pre-arranged groups of a certain size and then making a case-by-case decision on corkage fees.
If you plan to sell alcohol on-site, allowing unrestricted BYOB may lead to problems in the future. It's easier to turn a "no" into a "yes" than vice versa, so it's best to consider corkage as if you already sold alcohol or to reconsider selling alcohol altogether.
Even if you don't sell alcohol and don't plan to, it's important to consider the potential impact of allowing customers to drink on your premises. Will it attract the right type of customers? Can you handle customers who have had too much to drink? Charging a corkage fee can encourage customers to moderate their drinking, even if you aren't losing out on in-house sales. If you later find it unnecessary, you can always cancel the fee.
How much is Corkage Fee UK
How much is the corkage fee in the UK usually? Corkage fees are typically charged per bottle opened on-site in the UK, with the fee varying according to the type of alcohol. Currently, the average corkage fees range from £12 to £15 for still wine, £15 to £20 for regular sparkling wine such as Cava or Prosecco, and £20 to £35 for champagne.
However, there is significant variation among venues, with some charging as little as £3 to £5 per bottle and others as high as £45 to £65. Generally, the corkage fee tends to be higher in venues with higher overall prices.
The corkage fee or BYOB charges in your local area and by similar venues is certainly something you need to consider before creating your own charge, as an unrealistic price will just convince customers to take their bottles somewhere else.
It's best to set a corkage fee that accurately reflects the impact of BYOB on your business. However, in practice, it may be difficult to determine this until you actually implement it. If you currently sell alcohol, calculate the average markup and use that as a basis for your corkage fee. If you don't sell alcohol, research your competitors and set the corkage fee accordingly. Regardless, be flexible and prepared to adjust the fee as needed.
So that’s what corkage fees are in the UK. Whether or not you charge a corkage fee is entirely up to you, as is what you charge for corkage. So it might be worth some trial and error to see what works for your business and your customers, being prepared to make quick adjustments if things aren’t working out.
