Man your pumps, Wetherspoons are coming

BenEadir

Geuze wrote: »

Good points.

Though I would compare petrol/diesel prices with off-licence beer prices.

Diesel = 1.50 per litre

Beer = from 1.80 to 4.00 per litre in off-licences

That's a better like for like comparison all right. You don't get to sit down for a chat with your mates after you buy a litre of petrol do you

Ben

BenEadir

Big Nasty wrote: »

Macro beer costs cq. 25c / Pt. to produce. Micro costs cq. X 3 times that. Macro breweries charge publicans cq. €1.50 / Pt. If Micros operated on the same mark up they would be charging publicans €4.50 per pint. Obviously Micros take the hit despite their operating costs in order to be somewhat competitive.

What galls me is that while Macros are charging publicans around €1.50 per pint they can afford to sell to the multiples (supermarkets) at cq. 75c a can. :mad:

BN, the cost of production is only part of the breweries total cost. Getting the product to market and supporting the promotion of the product also have to be paid for by the breweries. Macros have huge economies of scale so their production costs will be much lower than micros but their distribution networks and in particular their marketing support is absolutely huge per pint produced relative to micros.

Comparing macros and micros pricing by looking at the production costs alone in isolation from all the other costs of getting the product to market is misleading. It's comparing apples with oranges.

Ben

BaZmO*

Big Nasty wrote: »

Macro beer costs cq. 25c / Pt. to produce. Micro costs cq. X 3 times that. Macro breweries charge publicans cq. €1.50 / Pt. If Micros operated on the same mark up they would be charging publicans €4.50 per pint. Obviously Micros take the hit despite their operating costs in order to be somewhat competitive.

What galls me is that while Macros are charging publicans around €1.50 per pint they can afford to sell to the multiples (supermarkets) at cq. 75c a can. :mad:

Where are you getting these figures from?

BenEadir

BaZmO* wrote: »

Where are you getting these figures from?

This thread has gone deadly silent all of a sudden. Has a taboo subject (the cost of producing and distributing beer) been raised? Is everyone afraid to talk about the elephant in the room as it relates to Weatherspoons?

Ben

Big Nasty

BaZmO* wrote: »

Where are you getting these figures from?

Do you think they are incorrect?

MadYaker

Rat-arsed for a twenty is what I've heard. Bring it on I say.

BaZmO*

Big Nasty wrote: »

Do you think they are incorrect?

It doesn't matter what I think, what's important is the facts, which I somehow doubt you are providing.

Big Nasty

BaZmO* wrote: »

It doesn't matter what I think, what's important is the facts, which I somehow doubt you are providing.

They might be out by 5c either way but you get the point anyhow, no?

the beer revolu

Big Nasty wrote: »

They might be out by 5c either way but you get the point anyhow, no?

If you just made up the figures they don't really count for anything.
So to repeat Bazmo's question, where did you get the figures? I'm curious too - not saying they're wrong but would like to know the source.

BaZmO*

Big Nasty wrote: »

They might be out by 5c either way but you get the point anyhow, no?

There's no point to get as you're just making up the figures, unless you can prove otherwise?

Big Nasty

the beer revolu wrote: »

If you just made up the figures they don't really count for anything.
So to repeat Bazmo's question, where did you get the figures? I'm curious too - not saying they're wrong but would like to know the source.

BaZmO* wrote: »

There's no point to get as you're just making up the figures, unless you can prove otherwise?

I'm not making them up - they were quoted to me by a brewer a couple of years back, costs may have changed slightly since then hence 'circa'.

BaZmO*

Big Nasty wrote: »

I'm not making them up - they were quoted to me by a brewer a couple of years back, costs may have changed slightly since then hence 'circa'.

By a Macro Brewer? Like head brewer of Diageo?

Big Nasty

BaZmO* wrote: »

By a Macro Brewer? Like head brewer of Diageo?

No, a well known Microbrewer.

BaZmO*

Big Nasty wrote: »

No, a well known Microbrewer.

So you have unverified secondhand information on the costs of making a Macro beer?

Big Nasty

BaZmO* wrote: »

So you have unverified secondhand information on the costs of making a Macro beer?

Sorry, didn't realise it was an exam. Do you think it's infeasible that a Macro brewery can produce a pint of beer for 25c?

BaZmO*

Big Nasty wrote: »

Sorry, didn't realise it was an exam. Do you think it's infeasible that a Macro brewery can produce a pint of beer for 25c?

It's not an exam, and I'm not having a go, but you can't just make up numbers to validate your argument. None of us know how much it costs to make a macro beer (fwiw I reckon it's actually much lower than the figure you gave, not that it matters though) but you can't just just the production costs in isolation, you would need to know their complete business model/plan and factor in things like advertising, promotions, etc., otherwise you're just comparing apples and oranges.

Big Nasty

BaZmO* wrote: »

It's not an exam, and I'm not having a go, but you can't just make up numbers to validate your argument. None of us know how much it costs to make a macro beer (fwiw I reckon it's actually much lower than the figure you gave, not that it matters though) but you can't just just the production costs in isolation, you would need to know their complete business model/plan and factor in things like advertising, promotions, etc., otherwise you're just comparing apples and oranges.

Again, I didn't make them up. You don't know which brewer I discussed this with. Maybe he worked for a macro brewer before going out on his own.

The point is, even if the figures are slightly off, that it costs Micro breweries way more per unit to produce their product than Macros so if you are paying the same or 50c more retail for a Micro beer it is still extremely good value all things considered.

Would you not agree?

The second point is that Macros are selling their product to the multiple at cq. 75c per unit (500ml can) yet charging publicans around twice that. Both the publicans and the public get screwed by the Macros when drinking in a pub in Ireland.

BenEadir

BaZmO* wrote: »

you can't just just the production costs in isolation, you would need to know their complete business model/plan and factor in things like advertising, promotions, etc., otherwise you're just comparing apples and oranges.

Hey BaZ, stop stealing my lines :-)

Ben

BenEadir

Big Nasty wrote: »

The second point is that Macros are selling their product to the multiple at cq. 75c per unit (500ml can) yet charging publicans around twice that. Both the publicans and the public get screwed by the Macros when drinking in a pub in Ireland.

Saying the publicans and public are being "screwed" by the macros is way too emotive and plain wrong BN. The macros (like all businesses) should price their respective products according to what the target customers are willing to pay.

There is loads of competition in the off trade due to the easy importation and distribution of substitute products. Go into any Tesco off licence or Aldi/Lidl and you'll see tons of cheap beer available in 500ml cans. If the macros don't price their product competitively it won't sell.

It's a totally different story in pubs where there is typically a small number of draught beers on offer. Less competition = higher prices.

No one forces us to pay high prices for crap beer. We (Jo public) are happy to pay which is a terrible reflection on us as consumers. It's not the macros fault we don't exercise better judgement when evaluating how much we are prepared to pay for Heinoweiser in pubs.

Simples :-)

Ben

Tube

Big Nasty wrote: »

Sorry, didn't realise it was an exam. Do you think it's infeasible that a Macro brewery can produce a pint of beer for 25c?

Quite a bit less. A micro brewery can produce a pint of 4.3% beer for 17 cent. Duty is around 24 cent. This assumes clever use of labour, but does not include marketing, distribution, the company pension scheme, health insurance etc.

A macro can probably produce a pint for around 5c, maybe less, but pays double the duty. Again, they have all the above, plus the Christmas party, sponsorship of the Aviva etc.

So it really depends on what way you look at it.

Big Nasty

Tube wrote: »

Quite a bit less. A micro brewery can produce a pint of 4.3% beer for 17 cent. Duty is around 24 cent. This assumes clever use of labour, but does not include marketing, distribution, the company pension scheme, health insurance etc.

A macro can probably produce a pint for around 5c, maybe less, but pays double the duty. Again, they have all the above, plus the Christmas party, sponsorship of the Aviva etc.

So it really depends on what way you look at it.

A Micro for 17c and a Macro for 5c? Maybe he was including packaging and delivery in his totals, I don't know for sure. It's still costs the Micros 3X as much though which was my whole point, I.e. Micro beer in s pub is pretty good value in comparison to Macro.

BenEadir

Big Nasty wrote: »

It's still costs the Micros 3X as much though which was my whole point

Not true. Certain costs in the entire production and supply chain will enable Macros to benefit from economies of scale and purchasing power but to a factor of 3 times??? No way. Are you suggesting Macro's get their electricity at a 66% discount to what Micro's pay? Are you suggesting Macro's pay their staff at one third the rate per hour Micro's pay?

It's economies of scale which facilitate lower production costs for Macro's Vs Micro's, not just marginally lower input costs.

The flip side of economies of scale however is that whilst you end up with a lower cost per unit you also end up with production volumes which require national/international scale to distribute and with that comes large organisational challenges and costs for management teams, complex finance and administration processes, large marketing spend, sophisticated distribution networks etc etc.

Don't get me wrong, when I pay €5:50 for a pint of micro craft beer I know a much higher percentage of the cost has gone into the actual product Vs a Macro beer and for that reason I am much happier paying a premium for a better product.

The holy grail for a craft brewery must be to get volumes up to a point where the unit cost of production and distribution is closer to the Macro figures without losing what makes a craft beer a craft beer in the first place. Now that's a challenge!!

Ben

Big Nasty

BenThere wrote: »

Don't get me wrong, when I pay €5:50 for a pint of micro craft beer I know a much higher percentage of the cost has gone into the actual product Vs a Macro beer and for that reason I am much happier paying a premium for a better product.

The figures I was given may not be correct however my point was that Micro beer @ €5.50 is extremely good value in comparison to Macro @ €5.

BenEadir

Big Nasty wrote: »

The figures I was given may not be correct however my point was that Micro beer @ €5.50 is extremely good value in comparison to Macro @ €5.

Don't think you'll find much argument with that statement here

Ben

BaZmO*

Big Nasty wrote: »

The figures I was given may not be correct however my point was that Micro beer @ €5.50 is extremely good value in comparison to Macro @ €5.

It depends on the beer though. I've had plenty of Micros that I wouldn't pay €2 for a pint.

"Micro" doesn't automatically equate to good quality/value.

Tube

BaZmO hit the nail on the head. An excellent beer might be worth €5.50, but micro doesn't automatically mean excellent.

There is also the pricing based on snob value going on. While some micro brewed beers cost more than macros, some don't. Some publicans will charge more for a micro beer even if they didn't pay any more for it.

BenEadir

Tube wrote: »

There is also the pricing based on snob value going on. While some micro brewed beers cost more than macros, some don't. Some publicans will charge more for a micro beer even if they didn't pay any more for it.

:O Are business owners not supposed to charge whatever their customers will pay? If customers are prepared to pay stupid prices for the perception of being 'cool' or whatever that's not the publicans fault.

Same goes for all products and services in a free economy. I can get a high quality tee shirt made in Cambodia for €5 in Dunnes or I can go to Hollister/Ralph Lauren and pay €40 for the same quality tee shirt made in the same factory for which the factory owner received the same €1 from both Dunnes and Ralph Lauren.

Choices choices :-)

Ben

Tube

BenThere wrote: »

:O Are business owners not supposed to charge whatever their customers will pay?

Absolutely, but not hide it under the "it's craft so it costs more" moniker if it's not true.

BenEadir

Tube wrote: »

Absolutely, but not hide it under the "it's craft so it costs more" moniker if it's not true.

And how exactly do they do that? I've never seen such statements made by any publican.

Ben

listermint

BenThere wrote: »

:O Are business owners not supposed to charge whatever their customers will pay? If customers are prepared to pay stupid prices for the perception of being 'cool' or whatever that's not the publicans fault.

Same goes for all products and services in a free economy. I can get a high quality tee shirt made in Cambodia for €5 in Dunnes or I can go to Hollister/Ralph Lauren and pay €40 for the same quality tee shirt made in the same factory for which the factory owner received the same €1 from both Dunnes and Ralph Lauren.

Choices choices :-)

Ben

Really doesnt mean people have to like it does it now ?

Its that type of ****whittery that would make me not bother popping into town for a pint and head to off license instead.

Sure its good business practice etc etc.