French taxes strangling three-star dining?

Rohit Khare (
Wed, 20 Jan 1999 19:36:59 -0800

This is an interesting topic, but handled by someone with no business
reporting background whatsoever. I have no answer to one fundamental
question: are these businesses profitable? The absolute amount of debt
and so on yields fun numbers to report, but nothing says outright what
the internal rate of return is, or if they're cash-flow positive. Simply
saying there's an IPO doesn't make a man rich. And what of the certainly-
interesting top-man insurance coverage Bernard must have? It's one thing
to securitize a rock-star's royalties, but the very business depends on
him not fricasee'ing his thumbs. Such a risk!

As for the Michelin's excessive luxuries, they are clearly correct:
bespoke cutlery, fine linens, and much more they could have gone
into. The class-war aspect of the story hasn't been picked up at all:
the NYT's own reviews have been roiled by accusations that "some
japanese noodle shack" shouldn't be three-stas just because it isn't
expensive enough. To say nothing of culinary diversity --- the real
beef with Gagnaire is the public's middling acceptance of his fusion
work. Heaven forbid Michelin actually elevate an 'ethnic' place.

After reading this, and the AmEx Platinum cardholder's Departures
($250 Cartier gift certificates for any letters to the editors;
Bentley handling reviews; and a roasting of Gagnaire) and the copy of
ShowBoats International at the doctor's office this morning, I
defintely feel out of th grad student loop :-)


PS. Bonus round: for extra snob appeal, a NYT piece on the
aperitif. As tempting as the pousse-rapiere can be for us converted
foie-gras lovers, it's a damned shame I missed the concoction at Tabla
on Jan 2nd... highly recommended, and don't pass up the lamb tandoori
raviolo and and the 'curried' foie gras. Remember, 1999 is India's
year to be hip -- hopefully a rising tide for Indian men on the meat
market, too :-)

January 20, 1999

Teetering at the Summit in France


S AULIEU, France -- A soft winter rain is falling on this sleepy
farm town on the western edge of Burgundy. The old hotels and
restaurants that line the main street are as gray and somber as the
overcast sky. Except one, La Cote d'Or, at the southern end of
town, one of the legendary inns and restaurants of France.

I park in a lot across the road and dodge through the rain to meet
my host, Bernard Loiseau, who hurries through the lobby, his arms
open wide in welcome. If anything, Loiseau is more famous than his
restaurant. Not many people in France can afford La Cote d'Or, but
all of them can see Loiseau -- and probably have -- on television,
in newspapers and in magazines. In a country where famous chefs are
as important as film stars and government officials, Louiseau is a
master at keeping himself in the public eye.

He is part of the elite fraternity of chefs with three stars in the
Guide Michelin, France's most important restaurant and hotel guide.
The 1998 Michelin lists more than 4,000 restaurants; only 21 have
three stars.

Once, getting three Michelin stars was a crowning achievement. A
chef so honored could rest on his laurels, confident that his
dining room and his bank account would always be full. No longer.
In 1996, for the first time since the guide began publishing at the
turn of the century, a three-star restaurant, Pierre Gagnaire, in
St.-Etienne, went bankrupt.

That same year, another three-star restaurant, the Auberge de
l'Eridan, near Annecy, closed briefly because Marc Veyrat, the
owner and chef, was some $9 million in debt. A reprieve from his
bankers allowed him to reopen a month later.

Gagnaire, too, reopened. He moved to Paris and, in three short
years, regained his three stars.

The fact is, starting up and running a three-star restaurant is
astonishingly expensive. Typically, such a restaurant has two
employees for every customer that its dining room can hold. And
with France's heavy taxes, even dinner bills of $500 a person fail
to cover costs.

Debate is simmering in France over just how much trouble the
three-star restaurants are in. How creative must chefs be -- not
just in their cooking, but in their financing -- to be merely able
to survive? Will the wildly rising costs of running these
establishments drive the best and the brightest elsewhere?

Not all three-star chefs have had difficulties as bad as those of
Gagnaire and Veyrat, but many are constantly casting about for
other sources of income and still find themselves in financial

I was in Saulieu to talk to Loiseau because he is handling his own
mountain of debt in a novel way: by going public. His business,
Bernard Loiseau SA (Bernard Loiseau Inc., in English) -- was listed
on the Paris Stock Exchange in December in a public offering that
netted him just over $3 million.

"I am a happy man," he said over a glass of champagne. "I have
provided for my future and created something that will last after

Well, maybe. Bernard Loiseau SA really has one asset: Bernard
Loiseau. "Should anything happen to him, the stock would be
worthless," one Paris market analyst said.

Nor would it have to be a fatal accident; losing just one Michelin
star could be a telling blow to his market value. Michelin
regularly demotes famous chefs. Ten years ago, Roger Verge's Moulin
de Mougins, near Cannes on the Cote d'Azur, had three stars; today
it has one.

If Loiseau's future is problematic, his Paris colleague Alain
Ducasse is really walking a financial high wire. Ducasse won his
first three-star rating from Michelin in 1990 for his restaurant
Louis XV in Monaco. In 1996, when he won another three-star rating
for his Paris restaurant Alain Ducasse, Michelin dropped the Louis
XV to two stars. Last year, the lost star was restored, making
Ducasse the first in recent times to hold six stars at one time.

Capitalizing on his fame -- and his obvious ability -- Ducasse has
been expanding at top speed. From his office on a top floor of the
town house that is his premier Paris restaurant, he directs a small
empire that includes the two three-star restaurants, a luxury
country inn in Provence, La Bastide de Moustiers, and three other
restaurants in Paris. In addition, he is president of chain of
hotels, has produced books and recordings, endorses products,
consults with restaurants around the world and appears regularly on
television and radio. A financial publication estimated his gross
income in 1998 to be around $30 million.

Usually photographed in a white chef's jacket, Ducasse, like most
media-savvy three-star chefs, actually spends little if any time at
his ovens. Mindful that the Michelin inspectors take a dim view of
chefs who rarely visit their own kitchens, he jets between Monaco
and Paris to keep an eye on the plats du jour.

With all his frenetic activity, and the income that accompanies it,
Ducasse freely acknowledges that his three-star restaurants would
not be viable businesses if he was paying for what he calls "the
walls": both restaurants are in buildings owned by someone else.
The Paris restaurant is in an annex of a Westin Hotel; the Louis XV
is in the Hotel de Paris.

Outside activities are hardly new for chefs like Ducasse. Paul
Bocuse has been endorsing, consulting and opening other restaurants
since his Lyon restaurant got its third star in 1965. Although he
inherited his "walls" from his family, Bocuse has often spoken out
against what many restaurateurs see as Michelin's excessive demands
for luxury in three-star restaurants.

Claude Lebey, a Paris restaurant critic, recalled Bocuse's
complaining one summer, when all his guests were dining outside on
the terrace, that in keeping with Michelin standards, his empty
dining room was still filled with flowers. "Each day," he said, "I
spend a fortune on flowers that are seen only by people going to
the bathroom."

Here in Saulieu, on a rainy Saturday afternoon, La Cote d'Or has
about a dozen guests for lunch but the public rooms are filled with
expensive flowers. "It's what a three-star place must do," Loiseau

In "Burgundy Stars" (Little, Brown, 1995), William Echikson
chronicled Loiseau's long battle for three stars. He recalled a
time when the volatile chef returned plates again and again to the
kitchen, shouting at his cooks: "It's not three stars! it's not
three stars!"

In 1977, he got his first star; in 1981, his second. Loiseau bought
the restaurant in 1982, and in 1991 was awarded his third star. It
followed closely a complete renovation of the restaurant and hotel,
including a new $3 million kitchen, the third remodeling since
1982. In the late 1980s, Loiseau said, he was $5 million in debt
with $40,000 a month in debt payments.

Construction of a new hotel wing, including an indoor swimming
pool, is to begin later this year.

"The guests want it -- Michelin wants it," Loiseau said.

Michelin insists that a good meal is its principal concern. But the
chefs point out that the difference between a great two-star meal
and a three-star meal is minimal and that over the years, the most
luxurious places are the ones that have have won the coveted third

A patron strolling into one of the newer three-stars is commonly
greeted by a small army of car parkers, receptionists, managers,
assistant managers, captains, coat room attendants, bathroom
attendants and the occasional florist. Out back is, invariably, an
extra-large kitchen team. Most three-star restaurants have around
40 people in the kitchen, including apprentices from all over the
world who work for nothing or in some cases pay up to $1,000 a week
for the privilege of peeling potatoes and watching the pros.

Most of the relatively three-stars, like La Cote d'Or in Saulieu,
Georges Blanc in Vonnas, the Auberge de l'Ill in Alsace, and the
Cote St.-Jacques in Joigny, have luxurious hotel accommodations.
Several offer helipads for particularly busy guests.

Ducasse divides France's luxury restaurants into three groups:

-- Those that have been run by families for generations, like the
Auberge de l'Ill, owned and run by generations of the Haeberlin
family. Jean-Claude Vrinat, the owner of Taillevent, in Paris,
inherited the business from his father.

-- Those run by restaurateurs like Ducasse and Loiseau who succeed
by engaging in many side activities.

-- Those that survive with the help of strong backers. Alain
Senderens, at Lucas Carton in Paris, had been backed by Japanese
partners until they pulled out last summer after the Asian market
collapse. The Japanese have been superseded by Paul Vranken, the
Rheims champagne maker which for many years has bottled and
distributed a champagne under the Lucas Carton label.

Almost all the newer three-star restaurants have backers. Gagnaire,
who went bankrupt in St.-Etienne in February 1996, turned up in
sleek new quarters in the center of Paris less than a year later.
He had silent partners in St.-Etienne, and almost certainly does in
Paris. (Most restaurateurs are extremely reluctant to discuss their
arrangements with outsiders, but the fact is that few chefs,
regardless of their talent, have the capital to open a luxurious
restaurant on their own.)

So is the luxury restaurant business in France in trouble? Ducasse
cites three-month waiting lists at his principal places as evidence
that it is not. Other veterans, like Vrinat at Taillevent, agree.
Relative newcomers to the three-star fraternity, like Alain Passard
at Arpege and Bernard Pacaud at L'Ambroisie, both in Paris, are
doing well with a minimum of public exposure and few if any related

In fact, most three-star restaurants outside the large cities are
profitable. Even Veyrat is digging out from under his mound of
debt, with interest rates that have now been cut to about 5 percent
from more than 16 percent -- probably by a banker who feared the
loss of his boudin de perche and his mille-feuille aux deux

Andre Daguin is less optimistic. Daguin, the owner of the Hotel de
France in Auch and president of the National Federation of the
Hotel Industry, maintains that the restaurant business in France is
in serious trouble. He does not cite the trend to shorter business
lunches, but rather the heavy value-added tax on restaurant bills
-- 20.6 percent -- and what he calls the crushing weight of
employee benefits -- up to 50 percent of wages for some employees.

"And now we have the 35-hour week," he said. "I don't see how
people in this industry, which is so labor-oriented, are going to

"Four thousand restaurants go out of business every year in
France," he said. "It's true that 2,000 new ones open, but many of
them are fast-food type places. The traditional French restaurants,
along with traditional French cuisine, are dying." Daguin also said
there was a lack of venture capital in France that operates as a
check on the development of new restaurants.

"In America, people are lining up to back restaurants," he said.
"Here, that kind of investment doesn't exist."

At 35, Didier Maillet is a veteran of the restaurant business.
Early on, he worked in the kitchens at the restaurants Joel
Robuchon and Faugeron in Paris. Five years ago he took over La
Sologne on the Avenue Daumesnil in Paris and has garnered some
enthusiastic reviews. But before that, he worked for three years in
Greenwich, Conn., and three years for Jean Banchet in Wheeling,

"Business is good here," he said, "and so is the life. But
everything moves faster in the States."

Maillet said that many of his friends want to go to America. "I
don't know if I'll go back," he said. "My wife and I talk about it.
I have a friend who wants to do something in California. Maybe. Who

If he goes, Maillet should have some distinguished company. Joel
Robuchon, who made his name and fortune in Paris, and Fredy
Girardet, who did the same in Crissier, Switzerland, are said to be
opening a restaurant in New York. Could that be the future of great
French cooking?


Of the more than 4,000 restaurants in France and Monaco rated by
the Michelin Guide, these are the 21 awarded three stars, the
highest ranking. While some are struggling, others are thriving. In
fact, most of those outside the major cities are profitable. The
new ratings will be announced in March.


Alain Ducasse, 59 Avenue R. Poincare; telephone: (011) 33 01 47 27
12 27

L'Ambroisie, 9 Place des Vosges; (011) 33 01 42 78 51 45

Arpege, 84 Rue Varenne; (011) 33 01 45 51 47 33

Lucas Carton, 9 Place Madeleine; (011) 33 01 42 65 22 90

Pierre Gagnaire, 6 Rue Balzac; (011) 33 01 44 35 18 25

Taillevent, 15 Rue Lamennais; (011) 33 01 44 95 15 01


Auberge de l'Ill, Illhaeusern; (011) 33 03 89 71 89 00

Auberge de l'Eridan, 13 Vieille Route des Pensieres,
Veyrier-du-Lac; (011) 33 04 50 60 24 00

Au Crocodile, 10 Rue Outre, Strasbourg; (011) 33 03 88 32 13 02

Boyer "Les Crayeres," 64 Boulevard Vasnier, Reims; (011) 33 03 26
82 80 80

Buerehiesel, Parc de l'Orangerie, Strasbourg; (011) 33 03 88 45 56

Georges Blanc, Vonnas; (011) 33 04 74 50 90 90

Jardin des Sens, 11 Avenue St.-Lazare, Montpellier; (011) 33 04 67
79 63 38

La Cote d'Or, 2 Rue Argentine, Saulieu; (011) 33 03 80 90 53 53

La Cote St.-Jacques, 14 Faubourg Paris, Joigny; (011) 33 03 86 62
09 70

Lameloise, Place d'Armes, Chagny; (011) 33 03 85 87 08 85

L'Esperance, St.-Pere; (011) 33 03 86 33 39 10

Michel Guerard, Les Pres d'Eugenie, Eugenie-Les-Bains; (011) 33 05
58 05 06 07

Paul Bocuse, au Pont de Collonges Nord, Lyons; (011) 33 04 72 42 90

Troisgros, Place Gare, Roanne; (011) 33 04 77 71 66 97


Louis XV, Hotel de Paris, Monte Carlo; (011) 33 377 92 16 30 01

The Aperitif Moment: Sip or Flinch

F irst impressions last longest. The downbeat of the conductor's
baton, the first step in a tango, the opening words in a flirtation
-- these initial moves can make or break.

So, why is the aperitif, the traditional mood-setter for the
perfect meal, so poorly understood, especially now, when
restaurants all over town seem to be bending over backward to
create distinctive pre-meal drinks?

On most fronts, American diners have become more sophisticated and
demanding, but when faced with the aperitif moment, they flinch.
"Something to drink before the meal?" is a question brimming with
promise. It deserves a better answer than, "Uh, a glass of white
wine?" Some diners, bestirring themselves, ask for a martini. Bad
idea. The martini is many things, but one thing it is not -- an

The truth is, most people are confused about what an aperitif is
and what it is supposed to do, and that includes professional
bartenders. Is it the same as a cocktail? If not, then where is the
dividing line? Questions like these have challenged the finest
minds in drinkdom.

"An aperitif is a wine-based product, served before the meal, to
which you need only add a garnish," said Jean-Luc Deguines, the
food and beverage director at the Mark Hotel in Manhattan.

Deguines, who once worked as a bartender at the posh Mirabelle in
London, is French, of course, and so is his definition. It is
clear, emphatic and highly traditional, limiting the aperitif to
herb-infused products like vermouth, Lillet, Dubonnet, St. Raphael
and Byrrh, all of them served on the rocks with a twist.

Ted Haigh, a drink historian who, under the name Dr. Cocktail,
oversees the cocktail discussions on America On Line, offers a more
inclusive definition. "The aperitif is what's known as a quinquina,
or a drink that contains quinine, a bitter agent, which is
diluted," he said. "The diluted bitterness is the key, I think.
Undiluted, it is a digestif, which is taken after the meal and is
intended to settle the stomach." (A liqueur, or cordial, he might
have added, is a sweet, spirit-based drink, usually consumed after
the meal.)

The Haigh definition would include all the drinks on Deguines'
list, plus bitter Italian aperitifs like Campari, Punt e Mes and
Cynar, an aperitif flavored with -- believe it or not --
artichokes. It also opens the door to the now-illegal absinthe and
its descendants, Pernod and Ricard, all of them flavored with

What all of these preparations have in common is enough bitterness
to stimulate the appetite and enough sweetness to make the
bitterness palatable. With the exception of absinthe, they are also
lightly alcoholic and therefore lift the spirits without numbing
the taste buds.

Certain wines do more or less the same job, although not the
big-shouldered chardonnays that many diners wind up drinking before
a meal. The white Burgundy wine known as aligote, which is
mouth-puckeringly tart when drunk on its own, blends perfectly with
creme de cassis to become the classic kir.

A chilled manzanilla or fino sherry also sets up a meal in fine
style. And Champagne has just the right crispness and acidity, not
to mention happy bubbles, to kick off a meal in memorable fashion,
especially if the restaurant, paying proper attention to the
all-important fun factor, has added a soupcon of this or that to
the glass, and perhaps a colorful garnish.

The festive role of the aperitif should not be underestimated. It
is, in a way, a before-meal cheerleader, and part of its task is to
grab attention.

"The art and skill of mixology is to take away the boring aspect of
what to drink before lunch or dinner,"said Salvatore Calabrese, the
author of "Classic Cocktails" (Sterling Publishing, 1998) and the
bartender at the Lanesborough Hotel in London. Showmanship counts,
in other words.

The world of the aperitif was calm and rational until the Americans
came along and invented the cocktail in the early 19th century, and
Europeans began experimenting with it early in this one. The
vermouth cassis and the Campari-based Americano and Negroni have to
be considered major steps forward in civilized life, but what are

Calabrese struggled with the taxonomy and found a comfortable spot
straddling the fence. "The Americano or Negroni are aperitifs in
the sense that they open the palate and stimulate digestion," he
said, "but they are also classic cocktails."

Aaron Von Rock, the wine director at Verbena in Manhattan, takes a
slightly more romantic view of the issue. The aperitif, which he
calls "the first step on that epicurean trip," can be defined as
much by its social function as its physical properties. "Cocktails
celebrate sociability and bring people together," he said. "That's
the mental focus I have when I have a cocktail. People who order an
aperitif pay more attention to what flavors are occurring and what
wines they will select."

There is ample evidence that restaurant owners and chefs around
town have been thinking hard about their before-dinner drinks
lately, and that they may even be a step ahead of their customers.
Diners who don't bother to ask what the house is serving in the
aperitif line can be missing out on a splendid way to start a meal.

At Gertrude's, Laurent Manrique has put his stamp on a classic
Gascon aperitif known as the pousse-rapiere, a combination of
Armagnac, Grand Marnier and Champagne served with a slice of
orange. Manrique infuses his Armagnac with oranges, cloves, vanilla
and various herbs to get a complex, spicy-pruny aperitif that
triggers subliminal cravings for foie gras.

For its 38th birthday, La Caravelle has come up with the Kir Royale
38, adding a little Cognac and Grand Marnier to Champagne.
Garnished with a slice of orange, it makes a rich, suave pre-meal
drink. Jacques Capsouto, at Capsouto Freres, has pulled off a nifty
trick by stealing some raspberry coulis from his pastry chef and
using it to make a bright, fruity Champagne aperitif.

Scarabee has solved the cocktail-aperitif argument by creating a
drink that can be either. Called a French martini, it starts with
blond Lillet infused with red currants. The aperitif-minded can
take it as is, chilled and pink, with a curl of lemon peel. Add
vodka, and it becomes a cocktail.

Once in a while, a stiff cocktail defies the rules and manages to
sneak into aperitif territory. The Juniperotivo at Monzu is one of
these imposters. Made with Junipero, a highly aromatic, herbaceous
gin from the people who make Anchor Steam beer, it's a
sweet-and-sour special that offsets the astringency of the gin with
lime juice, mint and pomegranate syrup.

"Although most aperitifs are in the low-alcohol range, this one
works because it has a tartness that gets the salivary glands
going, and a touch of sweetness and herbaceousness that sets up the
palate for food," said Jerri Banks, Monzu's food and beverage

The restaurant has also done a clever variation on the Americano,
substituting the fruity, chocolatey Punt e Mes for sweet vermouth.

For sheer audacity, however, Tabla takes the cake. The customer who
orders a Ginger Citrus Snap gets a mixture of Stoly Oranj and
ginger eau de vie that occupies two-thirds of a curved martini
glass. A waiter then tops up the glass with Billecart-Salmon
Champagne and deposits small pile pomegranate seeds in the drink.
As the bubbles collect around the seeds, the seeds begin to rise.
The bubbles fall away, and the seeds fall. Whee!

This alcoholic lava lamp has found an audience. One woman, filling
out a comment card, wrote, "It makes me feel like running naked
down Madison Avenue and setting my hair on fire." That's a good
start to any evening.
Adapted from La Caravelle
Time: 5 minutes

1 teaspoon Cognac
1 teaspoon Grand Marnier
6 to 8 ounces Champagne
1/2 orange slice.

1. Pour Cognac and Grand Marnier into bottom of Champagne flute.
Fill glass with Champagne, and garnish drink with orange slice.

Yield: 1 aperitif.

Adapted from Monzu
Time: 15 minutes

4 large mint leaves
1/2 ounce simple syrup (see note below)
1 1/2 ounces Junipero, or other gin
1/2 ounce lime juice
1/4 ounce pomegranate syrup.

1. In mixing glass, using a spoon, crush 2 mint leaves in the
simple syrup, and add gin, lime juice and pomegranate syrup.

2. Pour into ice-filled shaker. Shake well, and strain into chilled
cocktail glass. To garnish, float the 2 remaining mint leaves on
surface of drink.

Yield: 1 aperitif.

Note: To make simple syrup, in small saucepan boil 1 cup water and
1 cup sugar, stirring occasionally until sugar is dissolved and
liquid is clear, about 5 minutes. Let cool before using. Store
refrigerated for up to a week.