Cost Breakdown of a pint

Hello,

I was wondering why is drink so expensive when you go out in ireland? How come it is cheaper to buy a pint of guinness abroad than in the country that actually brews it?

Anyone care to give a price breakdown incl. cost price and mark up etc.?

Is it all just greed???

oblivious

Deleted User wrote: »

I was wondering why is drink so expensive when you go out in ireland?

Vat, publicans, a lack of brewing competition and generally the public willingness to pay for it

Ponster

From 2004

Incidence of Duty and VAT Price Excise Content VAT Content Total Tax Content Tax Exclusive Price Tax as a % of Price
€ € € € € %
Pint of Stout 3.55 0.47 0.62 1.09 2.46 30.6



The British Beer and Pub Association (BBPA), which represents the brewing and pub industry, said in 2007 that "beer companies make only 0.7 pence profit per pint".

BeerNut

Ponster wrote: »

"beer companies make only 0.7 pence profit per pint".

In the UK, where there's proper competition, perhaps. But there are much higher profits to be made here. A fair amount of the cost of your average pint of Diageo or Heineken beer must be spent on advertising and sponsorship. More than on hops and barley, I'd say.

Adyx

Compared to bottled beer and spirits, draught is not very profitable at all. A lot of the time it's more trouble than it's worth in this country.

BeerNut

Adyx wrote: »

Compared to bottled beer and spirits, draught is not very profitable at all.

You mean it's slightly less of a rip-off.

Adyx wrote: »

A lot of the time it's more trouble than it's worth in this country.

And yet there's not a single pub would dare drop it. It's plenty worth the trouble.

rubadub

Adyx wrote: »

Compared to bottled beer and spirits, draught is not very profitable at all. A lot of the time it's more trouble than it's worth in this country.

What is the logic behind that? surely they would either increase the draught prices or decrease the spirit/bottle prices so they sell more of them. Why would a pub have such wild margins on stuff, it is not really like a supermarket with loss leaders (or is it?).

The majority of people I see go to a pub to get to a certain blood alcohol level, a shot of spirits has about half the alcohol as a pint so it would make sense to be able to sell them at lower margins, as they end up selling more "drinks".

guildofevil

Adyx wrote: »

Compared to bottled beer and spirits, draught is not very profitable at all. A lot of the time it's more trouble than it's worth in this country.

I don't know where you got that idea. Kegging is the cheapest and easiest way for a brewery to package a beer (well, cask is easier but that doesn't really count in Ireland).

BeerNut

Yeah, but look at the mark-up on bottles. In fact, it's a wonder the pubs even bother with alcoholic drinks.

Adyx

guildofevil wrote: »

I don't know where you got that idea. Kegging is the cheapest and easiest way for a brewery to package a beer (well, cask is easier but that doesn't really count in Ireland).

For breweries maybe, but not for pubs especially after you factor in all the associated costs. Cold rooms, coffin coolers, pythons, waste, glasses etc. Fair enough some things are a long term investment but they do require a lot of maintenance and pythons are supposed to be replaced after several years.

Adyx

BeerNut wrote: »

You mean it's slightly less of a rip-off.

And yet there's not a single pub would dare drop it. It's plenty worth the trouble.

Actually given the quality of draught in most pubs in Ireland, it's even more of a rip-off. Tbh if I had a pub I would certainly consider keeping the draught to a minimum and ideally no Diageo muck.

rubadub

Adyx wrote: »

For breweries maybe, but not for pubs especially after you factor in all the associated costs.

But surely they have all that factored in. Like I said before if pints were really so unprofitable surely they would up the price and/or lower the price on the spirits? it would be nonsensical not to.

Adyx

rubadub wrote: »

But surely they have all that factored in. Like I said before if pints were really so unprofitable surely they would up the price and/or lower the price on the spirits? it would be nonsensical not to.

Not unprofitable but markedly less so than bottled beers and spirits. My point is that compared to a bottle of Heineken say, between the cost of storage, maintenance and losses due to waste, the profit margin is a lot lower for a pint. Actually even without these issues factored in, it's still lower. I think in some places, draught is kept on more out of habit/appearances then the money that can be made from it.

It makes more sense to keep spirits prices relatively high because the demand is so great and generally a mixer (also very high profit margins) is required. We sell more vodka a week than anything else and each of those shots of vodka gets a mixer of some sort.

Of course this is all from my experience and different pubs have different costs and prices etc.
Also I'm not defending drink prices - they are a rip-off. But there is a lot less room to manoeuvre with draught.

rubadub

Adyx wrote: »

I think in some places, draught is kept on more out of habit/appearances then the money that can be made from it.

I am still totally confused. You are saying draught is just for appearance, so why not increase the price/margin to the same level as spirits? You say spirits have high demand and lead to very high margins, so higher pint prices would turn people off the pints (which they do not want to sell) and lead people towards spirits and so the pub would enjoy even more profit. Either I am missing something, or the bar manager is a complete idiot!

I can understand loss leaders in supermarkets, but not in pubs. I would love to see a typical pubs accounts. In a thread a while back a guy who worked in a bar was talking about how expensive it was to supply bottles.

oblivious

Adyx wrote: »

For breweries maybe, but not for pubs especially after you factor in all the associated costs. Cold rooms, coffin coolers, pythons, waste, glasses etc. Fair enough some things are a long term investment but they do require a lot of maintenance and pythons are supposed to be replaced after several years.

The are alot of pubs/hotels that use a cheep flash cooler, I have even seen them use in a very well know 5 star hotel

Generally most kegged beer is stable (sterile filtering/ pasteurization) with out the need for cold room

Quint

I think what Adyx is trying to say, when you buy a vodka and coke in a pub in town for €7.50 the markup is 800%, or a bottle of Miller for €5.50 the markup is 600%, but a pint for a fiver the markup is only a pityful 300%. Hardly worth their while

rubadub

Quint wrote: »

I think what Adyx is trying to say, when you buy a vodka and coke in a pub in town for €7.50 the markup is 800%, or a bottle of Miller for €5.50 the markup is 600%, but a pint for a fiver the markup is only a pityful 300%. Hardly worth their while

Right, but I am still confused whey there are such wildly different margins. I mean do O'Briens sandwich bars have 800% markup on chicken sandwiches and only 300% markup on turkey ones?

I would have thought they would all be fairly balanced, if they are so different I would expect some pub to market themselves as a "spirit pub", and really just focus on spirits. Most people I see are on pints, so their pub would be full of punters at the 800% markup (or 400% to ensure they get all the customers from the pubs working at 800%).

If it was truly hardly worth their while, they would not do it, so logically it obviously is worth their while...

Quint

rubadub wrote: »

Right, but I am still confused whey there are such wildly different margins. I mean do O'Briens sandwich bars have 800% markup on chicken sandwiches and only 300% markup on turkey ones?

I would have thought they would all be fairly balanced, if they are so different I would expect some pub to market themselves as a "spirit pub", and really just focus on spirits. Most people I see are on pints, so their pub would be full of punters at the 800% markup (or 400% to ensure they get all the customers from the pubs working at 800%).

If it was truly hardly worth their while, they would not do it, so logically it obviously is worth their while...

And remember about 2 months ago, someone that worked in a pub was saying the complete opposite. Bottles were so much hassle they weren't as much as pints to the pub owner.
Either way, I've yet to see a poor publican. They're always one of the most well off people in the town

Adyx

rubadub wrote: »

I am still totally confused. You are saying draught is just for appearance, so why not increase the price/margin to the same level as spirits? You say spirits have high demand and lead to very high margins, so higher pint prices would turn people off the pints (which they do not want to sell) and lead people towards spirits and so the pub would enjoy even more profit. Either I am missing something, or the bar manager is a complete idiot!

I can understand loss leaders in supermarkets, but not in pubs. I would love to see a typical pubs accounts. In a thread a while back a guy who worked in a bar was talking about how expensive it was to supply bottles.

Draught is not a loss leader though, it can be profitable but it's nowhere near as profitable as other forms. It would make no sense to increase the price of a pint any higher - I think we all agree it's too much already.

oblivious wrote: »

The are alot of pubs/hotels that use a cheep flash cooler, I have even seen them use in a very well know 5 star hotel

Generally most kegged beer is stable (sterile filtering/ pasteurization) with out the need for cold room

Where I work we have a cold room and 3 coffin coolers. Not only do the coffins chill the beer lines but they pump cold water along the pythons and through the T-bars/swan necks too. I have seen what happens when a coffin breaks down and the beer is unsellable. The cold room ensures that new kegs are chilled to the correct temperature before being tapped up.

Quint wrote: »

I think what Adyx is trying to say, when you buy a vodka and coke in a pub in town for €7.50 the markup is 800%, or a bottle of Miller for €5.50 the markup is 600%, but a pint for a fiver the markup is only a pityful 300%. Hardly worth their while

:P I wish. Most pubs and nightclubs here are a rip-off (not to that degree though) but tbh I don't care any more.

oblivious

Adyx wrote: »

Where I work we have a cold room and 3 coffin coolers. Not only do the coffins chill the beer lines but they pump cold water along the pythons and through the T-bars/swan necks too. I have seen what happens when a coffin breaks down and the beer is unsellable. The cold room ensures that new kegs are chilled to the correct temperature before being tapped up. .

Change over to cask ale, 10c is regarded as cool :P

guildofevil

The difference in margins is actually quite easy to explain. The price is determined by what the market will bear, not the desired profit margins. The price of a pint in any given pub represents what they think they can get away with, without driving people out the door. A few years ago someone discovered that some people will pay even more for bottles, so they set them at a premium price when compared to draught.

However, if your average brand loyal Irish drinker goes into a pub and orders a pint of his chosen yellow fizz, he will not be happy to be told that it isn't available. If he is a pint drinker, it is unlikely he will be happy with the notion of paying more for a 330ml bottle than he expected to pay for a pint and he will head elsewhere.

As to the cost/hassle of taps, lines, chillers, etc. for draught, many pubs have much of this taken care of for them by the breweries who supply the beer. Glasses are also needed for bottles and bottles create their own problems, as they also need to be chilled and they generate a lot of waste (empty bottles) which has to be dealt with.

guildofevil

guildofevil wrote:

...a pint of his chosen yellow fizz...

That's a great quote - a testament to the ****e that we drink here...

So, it seems to come down to taxes and what they can get away with as far as I can read...would it not make more sense for some pub or chain of pubs to knock the markup right down and then profit on quantity?

oblivious

Deleted User wrote: »

would it not make more sense for some pub or chain of pubs to knock the markup right down and then profit on quantity?

The Puboc's in England do that

Adyx

oblivious wrote: »

Change over to cask ale, 10c is regarded as cool :P

If only I could. Every time I go to work there seems to be another problem - lines weren't cleaned, coffins blown up, gas leaking (N2/CO2 obviously). Draught really is too much hassle.

Unfortunately I don't think the Carlsberg/Bud/Heineken drinkers around here would appreciate me taking that away from them. Although since this is Waterford warm large bottles of Guinness fly off the shelves.

oblivious

Adyx wrote: »

Unfortunately I don't think the Carlsberg/Bud/Heineken drinkers around here would appreciate me taking that away from them.

Ah I know

Adyx wrote: »

Although since this is Waterford warm large bottles of Guinness fly off the shelves.

It a start, would you ever stocking another stout like O'haras or another Irish micro?

Adyx

guildofevil wrote: »

The difference in margins is actually quite easy to explain. The price is determined by what the market will bear, not the desired profit margins. The price of a pint in any given pub represents what they think they can get away with, without driving people out the door. A few years ago someone discovered that some people will pay even more for bottles, so they set them at a premium price when compared to draught.

However, if your average brand loyal Irish drinker goes into a pub and orders a pint of his chosen yellow fizz, he will not be happy to be told that it isn't available. If he is a pint drinker, it is unlikely he will be happy with the notion of paying more for a 330ml bottle than he expected to pay for a pint and he will head elsewhere.

As to the cost/hassle of taps, lines, chillers, etc. for draught, many pubs have much of this taken care of for them by the breweries who supply the beer. Glasses are also needed for bottles and bottles create their own problems, as they also need to be chilled and they generate a lot of waste (empty bottles) which has to be dealt with.

Agreed in principle but as I said my posts were based on my own experiences. All maintenance of equipment is down to us with the exception of lines/taps and the gas dispensing equipment. As for bottles, again in my experience most people don't use glasses unless it's a pint bottle. The empty bottles are all either reused or recycled. You're spot on regards paying more for bottles. I'm not 100% sure but the cost of a bottle is around the same as the cost of a pint. Operating costs for draught might be higher though.

Adyx

oblivious wrote: »

Ah I know






It a start, would you ever stocking another stout like O'haras or another Irish micro?

Not where I work. It's a large "discobar" and nightclub type place and while we do sell a fair amount of Guinness in the bar, it's mostly Heineken these days. Also because we open late, a lot of people have moved onto spirits by the time they get to us. Actually they only thing I usually get asked for that we don't stock is Fosters. Which sums it up really :rolleyes:. There's is little demand in Waterford for anything besides the usual staples.

ablesun

hi folks, quick question

If a pint of larger costs €4 how much is the wholesale cost of a pint inclusive of tax/vat and profit
in other words

cost of pint of larger wholesale (approx)=
cost of tax/vat on 1 pint larger (approx)=
profit gained on 1 pint of larger (approx)=

total= €4

thanks:)

rubadub

ablesun wrote: »

hi folks, quick question

Check this thread
http://www.boards.ie/vbulletin/showthread.php?t=2056119081

Martyn1989

Deleted User wrote: »

would it not make more sense for some pub or chain of pubs to knock the markup right down and then profit on quantity?

Thats what bars do with their mid week €2 all drinks/pints etc.

A pub permenantly knocking down their prices probably wont happen, I believe they call it the 'race to the bottom' and it is something I can't see many publicans wanting to do.