High Retail Markups in Beverages...???

Some of our favorite refreshing beverages carry some of the heftiest retail markups.

Bottled water is wildly popular -- Americans spent $16 billion on the ubiquitous drink in 2007 -- and it's wildly overpriced, considering that 40 percent of bottled water is nothing but filtered tap water. In fact, for the price of a single bottle of "Evian" bottled water, you could pay for 1,000 gallons (3,785.4 liters) of municipal tap water. With bottled water, you're not paying for the H2O, but rather the packaging and the convenience.

Coffee is another culprit, especially if you buy it in a coffee shop. If you make coffee at home, it costs between 25 and 50 cents a cup, depending on the quality of your beans. That same cup will cost you well over $3 at "Starbucks" -- the same price that store might pay for an entire pound of beans wholesale. Interestingly, only about 25 cents of a $3.75 latte is profit for Starbucks. The rest pays for importing and roasting the beans, milk, the cup, labor and overhead costs.

But the biggest beverage markup of them all belongs to Wine in restaurants. The average retail markup on a bottle of wine in a restaurant is 300 percent. The best advice: Bring your own bottle and pay the $10 corking fee.


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