How much profit does a pub make on a pint ?

Jumboman

Just wondering how much profit a pub makes on a pint ? I know they have overheads but I believe they could sell pints for 4 euro and still make a good profit. I'm I right in saying that pubs are paying less than 2euro a pint ?

If they sold pints cheaper they would end up making more money by getting more people into the pub.

In my opinion publicans only have them selfs to blame for the collapse in the pub trade they are rip off merchants.

kryogen

They are generally not paying less then 2euro a pint no, and then you have to add in the VAT on each pint and to be perfectly honest, draught beer aint worth a **** in terms of profit margin

catallus

It's hard to run a business, anyone who has tried knows there's overheads and all sorts of expenses.

That said; it's my solemn belief that they make about €2 per pint priced at €5.50.

But anytime this issue is brought up online some people seem to think a publican is making about 20c a pint, which is ridiculous.

So it's €2 pure cream.

Jumboman

kryogen wrote: »

They are generally not paying less then 2euro a pint no, and then you have to add in the VAT on each pint and to be perfectly honest, draught beer aint worth a **** in terms of profit margin

If you can buy a can of beer for a euro or less then surely draught beer must be even cheaper ?

Jumboman

catallus wrote: »

It's hard to run a business, anyone who has tried knows there's overheads and all sorts of expenses.

That said; it's my solemn belief that they make about €2 per pint priced at €5.50.

But anytime this issue is brought up online some people seem to think a publican is making about 20c a pint, which is ridiculous.

So it's €2 pure cream.

Makes sense how is it that some pubs can charge as little as 3euro a pint ? while others charge over 5euro for the same pint.

TheBikeGuy

Jumboman wrote: »

Just wondering how much profit a pub makes on a pint ? I know they have overheads but I believe they could sell pints for 4 euro and still make a good profit. I'm I right in saying that pubs are paying less than 2euro a pint ?

If they sold pints cheaper they would end up making more money by getting more people into the pub.

In my opinion publicans only have them selfs to blame for the collapse in the pub trade they are rip off merchants.

I think on average 33% of the price goes to the government in taxes, 33% to the manufacturer (Diageo for Guinness), the Publican then gets the remaining 33%. These are rough figures (I saw them on RTE news around the time of a new budget a few years ago) which obvious vary with different pints and prices.

So on a 4 euro pint the Pub gets €1.33, which has to cover premises, wages , heating, entertainment etc.

Making a 33% margin before costs is hardly the work of rip off merchants

Jumboman

TheBikeGuy wrote: »

I think on average 33% of the price goes to the government in taxes, 33% to the manufacturer (Diageo for Guinness), the Publican then gets the remaining 33%. These are rough figures (I saw them on RTE news around the time of a new budget a few years ago) which obvious vary with different pints and prices.

So on a 4 euro pint the Pub gets €1.33, which has to cover premises, wages , heating, entertainment etc.

Making a 33% margin before costs is hardly the work of rip off merchants

Thats if your luckly enongh to get a pint for 4euro most places I go to I'm paying atleast 5euro for a pint.

Rabies

Normal is anything from 65-75% GP here. Max would be 80% depending on the venue location and clientele.
My current venue runs between 70-80% GP.
Last one was 65-75%
Beer price is NZ$8-$12

catallus

http://www.guardian.co.uk/graphic/0,,2213708,00.html

People look at the cost of a can of beer in Tesco and are justifiable skeptical about the poor-mouth claims of publicans.

But it's like any other business; you have to get the bodies in to consume the product to make it cost effective.

I still maintain the profit has to be over 40%

TheBikeGuy

Jumboman wrote: »

Thats if your luckly enongh to get a pint for 4euro most places I go to I'm paying atleast 5euro for a pint.

Guinness is less than 4euro in my local, a suburb of Dublin. If your talking of city centre pubs they have much higher rents to cover, which has to be covered in the price.

Also for foreign drinks shipping and importation costs have to be added

deconduo

A friend was looking at keg prices recently for a party and it worked out at about €2.25 per pint.

TheBikeGuy

catallus wrote: »

http://www.guardian.co.uk/graphic/0,,2213708,00.html

People look at the cost of a can of beer in Tesco and are justifiable skeptical about the poor-mouth claims of publicans.

But it's like any other business; you have to get the bodies in to consume the product to make it cost effective.

I still maintain the profit has to be over 40%

They wouldn't be closing in record numbers if profits were so high

Sofiztikated

Without knowing what costs the bar has, it's hard to say what profit is made on a pint.

Even on bottles, it's often cheaper, per bottle, to purchase from a supermarket than for a pub to purchase from a supplier.

Rabies

catallus wrote: »

http://www.guardian.co.uk/graphic/0,,2213708,00.html

People look at the cost of a can of beer in Tesco and are justifiable skeptical about the poor-mouth claims of publicans.

But it's like any other business; you have to get the bodies in to consume the product to make it cost effective.

I still maintain the profit has to be over 40%

Over here most supermarkets sell below the cost that bars purchase cases at.

We pay anything from $39-$52 for a 24pk of Heineken. That does not include GST.
All the major chains are selling a 24pk for $37-$39 a case.

catallus

TheBikeGuy wrote: »

They wouldn't be closing in record numbers if profits were so high

Even in the boom bars (and restaurants) were opening and closing faster than one could blink.

Sofiztikated

catallus wrote: »

Even in the boom bars (and restaurants) were opening and closing faster than one could blink.

A lot of that was to do with the sale of licences, and sale of property.

catallus

Sofiztikated wrote: »

A lot of that was to do with the sale of licences, and sale of property.

But also with the failure to get people in the building.

That's what it's all about as far as I can see.

The traditional model is to get as many people in as possible; but demographic facts in Ireland preclude that; so we have exorbitant prices even in the city centre.

kryogen

We make between 1.30 and 1.80 off a pint of lager (ill have to check the exact figure) not exactly sure how that can be classed as robbery when you have to pay for things like electricity, staffing costs, stock costs, heating, license, VAT, insurance, telephone, internet etc etc etc etc etc

kryogen

Jumboman wrote: »

If you can buy a can of beer for a euro or less then surely draught beer must be even cheaper ?

Look into that a little bit more

Tesco can sell the cans at a loss, write it off to tax and claim a percentage of it back, all the info is out there if you just look for it.

Fixer Upper

Reduced prices can often mean a more undesirable crowd, trouble etc which ends up costing more on security and such and can also drive away customers - so its catch 22 I guess.....

Sky King

You can't compare it to a supermarket - they sell beer below cost to get people in.

Somebody above mentioned a 33% margin - but it's not a margin. They have to pay commercial rates, electricity, light, heat, bar staff, insurance, security, maintenance, management and themselves out of it - and their pub has to make a profit.

If it was that lucrative you wouldn't have pubs closing all over the place every week - which they are.

Red Crow

VAT is going to be a major expense when you're tripling your cost price.

Lyaiera

There's lots of people who have no idea what "profit" is in this thread.

suicide_circus

in dublin city centre i know a place where i will pay €3 for a pint and i know another place where i will pay €6.20 for a pint. to be honest, neither see much of my business, they're both full of arseholes...just different types of arseholes.

the real rip off lies with soft drinks/splits. come to think of it, €4/5 for 35.5ml of low grade vodka/gin/whiskey is also extortionate.

rubadub

Rabies wrote: »

Over here most supermarkets sell below the cost that bars purchase cases at.

We pay anything from $39-$52 for a 24pk of Heineken. That does not include GST.
All the major chains are selling a 24pk for $37-$39 a case.

Have you any evidence of this below cost selling. I hear publicans talk about it all the time, but no evidence. I do know distributors attempt to charge publicans a fortune, some of these morons seem to think everybody pays the same wholesale prices, and therefore proclaim below cost selling, simply because they get charged more.

Sky King wrote: »

You can't compare it to a supermarket - they sell beer below cost to get people in..

kryogen wrote: »

Tesco can sell the cans at a loss, write it off to tax and claim a percentage of it back, all the info is out there if you just look for it.

I have looked for the info and never found any evidence at all, NEVER, supermarkets do not readily disclose figures.

What I did find was very interesting figures from the UK. They have a similar enough situation as here, moaning publicans and claims of below cost selling. When there was talk of setting a minimum price the UK also investigated making below cost selling illegal, as it was presume it was so widespread. When investigated it found that only 2-4 products were being sold below cost in all the major supermarkets combined, these were oddball products too, not your big name trays of beer you see on sale. The idea was scrapped because of this.

A few alleged publicans post on boards, none were ever able to provide a links below cost selling went on to the extent they make out, any links at all, whether believable or not.

And non of the publicans ever responded to my questioning of the below cost model in convenience type stores. e.g. my centra frequently has 20 Heineken for €15, I have never seen people doing a weekly shop there, most getting the beer are only buying the beer.

Sky King

rubadub wrote: »

Have you any evidence of this below cost selling.I hear publicans talk about it all the time, but no evidence....
I have looked for the info and never found any evidence at all, NEVER, supermarkets do not readily disclose figures.

They do. I have seen it in 'official' reports on the drinks industry in Ireland.

rubadub

Sky King wrote: »

They do. I have seen it in 'official' reports on the drinks industry in Ireland.

Can you link to anything?

I would have guessed that a private business would not have to disclose their purchase prices.

My comments in another thread

rubadub wrote: »

It would be ridiculous to ignore supermarket prices though, my mate is a barman and the owner buys most of his longnecks in the supermarket. The local centra was doing 20 heineken for €15, 75cent a bottle. I have seen heineken longnecks going for 5.50 in the city centre....

This "below cost selling" is trotted out all the time by publicans & vitners. I have absolutely no doubt that the local centra is not selling these 75c bottles at a loss. I know many people who have got them and when I see people queuing up very few are doing any other shopping there, let alone a full weeks shopping like in tesco, which is what this "below cost" marketing strategy is supposed to be all about.

I would personally love to see below cost selling of alcohol banned, I doubt any drink I buy would increase, and it would shut those annoying publicans up spouting what they know fine well is bullshit.

In other threads publicans have come on saying they can pay ~€35 for a 24 heinekens from the "proper distributor", they are the eejits if they pay this, and its these same morons who then claim supermarkets MUST be below cost selling, just because they are so stupid they pay whatever is asked of them, when they can freely walk into a supermaket and buy there.

I am also not sure if that €35 claim included VAT.

And another good previous thread with figures
How is the price of a pint calculated?

the beer revolu

rubadub wrote: »

Have you any evidence of this below cost selling. I hear publicans talk about it all the time, but no evidence. I do know distributors attempt to charge publicans a fortune, some of these morons seem to think everybody pays the same wholesale prices, and therefore proclaim below cost selling, simply because they get charged more.




I have looked for the info and never found any evidence at all, NEVER, supermarkets do not readily disclose figures.

What I did find was very interesting figures from the UK. They have a similar enough situation as here, moaning publicans and claims of below cost selling. When there was talk of setting a minimum price the UK also investigated making below cost selling illegal, as it was presume it was so widespread. When investigated it found that only 2-4 products were being sold below cost in all the major supermarkets combined, these were oddball products too, not your big name trays of beer you see on sale. The idea was scrapped because of this.

A few alleged publicans post on boards, none were ever able to provide a links below cost selling went on to the extent they make out, any links at all, whether believable or not.

And non of the publicans ever responded to my questioning of the below cost model in convenience type stores. e.g. my centra frequently has 20 Heineken for €15, I have never seen people doing a weekly shop there, most getting the beer are only buying the beer.

No evidence as such but about 5 years ago I worked for a drinks importer and distributor. I remember at one point we got a container of European 5% Heineken really cheap - we were able to sell it far cheaper than Heineken Ireland or any other distributor could sell the Irish 4.3% Heineken for.
But at the same time Tesco were retailing 4.3% Heineken at about 20% less than we were wholesaling ours for.
While it is possible, I doubt they were sourcing it that cheap.

P_1

Guessing out loud here but lets say that a pint costs 2 euro for the pub to buy, the pub and the pub opens for 5 hours a day.

Lets say the pub's rent is 2k a month = €66 a day = €13.33 an hour on rent.
The pub employs 5 people paid at minimum wage = €43.25 ah hour on wages.

Two very basic expenses for the pub that means that they need to profit by at least €56.58 an hour to stay afloat.

So if the pub charges €4 for a pint they need to sell at least 29 pints an hour to break even from the rent and the wages. Say if the pub owner themselves wants to make at least the minimum wage the pub needs to sell at least 32 pints in the hour.

rubadub

the beer revolu wrote: »

I remember at one point we got a container of European 5% Heineken really cheap - we were able to sell it far cheaper than Heineken Ireland or any other distributor could sell the Irish 4.3% Heineken for.

+1, my local eurospar often has 5% heineken (scottish market) alongside 4.3% for a lot less. This just demonstrates that the manufactuer and/or distributors can have very different prices for different retailers and/or markets.

the beer revolu wrote: »

While it is possible, I doubt they were sourcing it that cheap.

I would not doubt it at all. What I would completely doubt is that centra were selling at a loss.

Go into most offies and €1 cans are readily available. In lidl own brand beer is below €1 as standard. There is nothing particularly unusual about heineken or the mainstream beers -so presumably they could easily supply to tesco at very low cost and get a reasonable profit.

Thing is heineken etc got away with charging a fortune for a mediocre product for decades, people have it in their head that it must cost a lot, and when they see it for €1 they accept the notion that it must/could be below cost -while really they should be asking "Why the hell was I willing to pay double that for years"

minidazzler

P_1 wrote: »

Guessing out loud here but lets say that a pint costs 2 euro for the pub to buy, the pub and the pub opens for 5 hours a day.

Lets say the pub's rent is 2k a month = €66 a day = €13.33 an hour on rent.
The pub employs 5 people paid at minimum wage = €43.25 ah hour on wages.

Two very basic expenses for the pub that means that they need to profit by at least €56.58 an hour to stay afloat.

So if the pub charges €4 for a pint they need to sell at least 29 pints an hour to break even from the rent and the wages. Say if the pub owner themselves wants to make at least the minimum wage the pub needs to sell at least 32 pints in the hour.

And that's at the very very very very low end of the scale, given you're not taking into account licence fee's, electricity, gas, garnishes, straws, napkins, maintenance, never mind out of trading hours work that needs to be done.

If pubs are always selling their drink for 3.50 etc, It's likely an old mans pub that has a very steady stream of regulars, is well established, the premises owned and the staff small, longterm and handy with fixing everything they have. You just can't expect the same out of a pub in Temple Bar, they do have to profit. (Though personally I'd never pay more than 5.20 for a pint in Ireland.... even that hurts emotionally :pac: )