Beverages are a major source of markup for restaurants, and most restaurants in big cities like Shanghai and Beijing don’t allow diners to bring their own soft drinks and alcohol. If guests insist, restaurants usually charge a corkage fee to recoup some of the lost revenue.

Corkage fees are not enshrined in the law in China, however, and there’s no regulation, so patrons and restaurant owners have been fighting over fees. Patrons say they’re unfair. Restaurant owners say they are justified as payment for service, and eateries need the money.

On February 12, the Supreme Court made it clear that “No outside drinks” and “Minimum charge for a private room” violate the Law of Contracts and the Law on the Protection of Consumers’ Rights and Interests, respectively. Diners can sue restaurants if they are saddled with charges, though few people are expected to go to court for very little money.

“There are still no specific laws or regulations,” says lawyer Dong Chundao from All Bright Law Offices in Shanghai, an opponent of these unwritten pro-restaurant rules for many years. “No outside drinks and minimum private room charges are both illegal. Restaurants are breaking the laws and they have no right to make such rules.”

Despite the court interpretation, the situation remains unclear. Some restaurants and hotels continue to charge, some don’t, and some are reconsidering.

“It (allowing outside drinks without fees) might be an inevitable trend,” says Jin Peihua, deputy secretary of the Shanghai Food and Cooking Association. It represents around 5,000 of the 50,000 restaurants in Shanghai.

Most member restaurants do not allow outside beverages, without a corkage fee; only 3-5 percent of members allow it, Jin tells Shanghai Daily. But since the court decision, he expects that percentage to soar to 20-30 percent.

The Shanghai Consumer Protection Commission says corkage fees should be negotiable between restaurant and diner.

Corkage fees are common in Hong Kong and in many European countries.

Lawyer Dong explains that by law, one party cannot unilaterally restrict the rights of the other party and exempt itself from its own obligations.

 Earlier this month Shanghai-based lawyer Zheng Qi took his own wine to dine at Thai Princess restaurant in Hongkou District, but was asked to pay a 30-yuan corkage fee. Zheng insisted this violated the “inequality clause” in the contract law.

On March 10, he sued the restaurant, requesting the court order that the fee be returned to him.

“I hope this case can act as a cautionary tale for the industry,” Zheng said afterward.

It’s common knowledge that sales of beverages of all kinds — soft drinks, wine and distilled spirits — are a big source of restaurant revenue.

A bottle of cola, 3.5 yuan (60 US cents) in a convenience shop, costs 10 to 30 yuan in a restaurant or a hotel. A branded 500ml bottle of baijiu (distilled spirit) costs around 280 yuan at supermarket but sells for 380-588 yuan in restaurants.

Corkage fees can be very high, as much as several hundred yuan in five-star hotels. “Some restaurants are just too greedy,” says 32-year-old diner Fang Zhuo. “It offends me each time I see the ‘No outside drinks’ sign on the menu. I’m not against the corkage fee, but against the overcharging.”

A recent online poll of more than 4,000 readers by Shanghai Morning Post shows that almost 84 percent choose to take their own beverages to restaurants; 11.7 percent say it depends on the quality of the restaurants; 4.7 percent said they would not take their own drinks because it would be “embarrassing” and make them appear cheap.

In fact, many restaurants started to accept outside drinks after Supreme Court’s announcement, and the corkage fee varies since last month, though in principle it is still a no-no.

Bao Yan Yi Hao, a membership restaurant in Jing’an District, allows diners to bring the wines it does not offer and charges 50 yuan per bottle to non-members.

Feng Shou Ri, a chain restaurant serving Ningbo cuisine, doesn’t allow outside alcoholic drinks, but if guests insist, it charges 100 yuan for each bottle of baijiu and 50 yuan for red wine.

Golden Times Shunfeng on the Bund charges 10 yuan for each glass of outside drinks.

Some five-star hotels charge even higher corkage fees — 200 yuan for a cola and 300 yuan for a bottle of wine.

“Though the Supreme Court has made it clear, the cost for diners to protect their rights is still rather high,” says lawyer Dong, “because there’s no specific legal regulation.”

Though diners can sue restaurants for corkage fees, few people are willing to go to the trouble for a small sum, especially given the time and energy required, Dong says.

“For restaurants, the law-breaking cost is quite low but for ordinary people, it takes a lot more to protect their interests,” he observes.

“We’re stuck in a dilemma” involving economics, says Jin from the food and cooking association. “I’ve received complaints from restaurants these days. They are having bad days.”

Profits are shrinking. According to association statistics, restaurant labor costs have risen almost 7 percent since the World Expo 2010 Shanghai, while the number of workers has decreased by 9 percent. At the same time, the average rent has soared by 30 percent since last year.

“There is already less room for profit, and now things are getting worse,” Jin says.

Some Hong Kong restaurants plan to close their Shanghai business, according to Jin. In Hong Kong, it is stipulated by law that outside drinks are not allowed.

Food safety is another reason that restaurants refuse outside drinks. “Who would take the responsibility if there was a food safety issue happened?” asks Jin from the restaurant association.

Last year two diners took two bottles of wine to a restaurant for dinner. They suffered food poisoning during the meal and were rushed to a hospital. Tests showed problems in their blood, not stomach and intestines. The two bottles of wine were later found to be fake.

Some guests even take raw shellfish to seafood restaurants, which cannot accept it because of strict safety regulations.

It’s not appropriate for the association to make regulations about corkage fees, says Jin. “We’ve had meetings on this issue, but we cannot set any guidelines for corkage fee standards. We’re trying to persuade our members to understand our situation.”

The Shanghai Consumer Protection Commission is going to work with the restaurant association to develop relevant regulations.

“A corkage fee should be negotiable, not compulsory, between diners and restaurant,” says Tao Ailian, the commission’s general secretary.