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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.

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BeerNut

I'm innumerate, not illiterate :cool:

P_1

Have to say that a 3% profit margin is surprisingly low.

Sure you'd almost get that by leaving the money in the bank

Sky King

You pay tax on profits, not turnover. Keeping low book profits is often done for this reason.

blackdog2

Haven't read through the thread, but I know a manager of a bar, who was being ridden by the council taxes levied upon him for no particular service availed (a country pub, had to pay for lighting that faced the road himself, had to pay for water/disposal himself), so of a pint at 4 euro, he made about 60 cent, which didn't cover the mortgage that was on the pub at the time

Cookie_Monster

Rabies wrote: »

Anyway, here are some pics from my super market trip.
Heineken 24pk wasn't on special. Was changed to the NZ equivalent of Steinlager. Prob swap back next week.

None of those are particularly good value either IMO. $1.50 a bottle is good, any more is standard. Beer is so bloody expensive here and you can't get proper sized can either, bottles are always more expensive.

Rabies

Cookie_Monster wrote: »

None of those are particularly good value either IMO. $1.50 a bottle is good, any more is standard. Beer is so bloody expensive here and you can't get proper sized can either, bottles are always more expensive.

I agree.
The average market price in a bar is crazy.

What I see is

Standard bottle beer/cider: $8.50-$9 (330ml)
"Premium" bottle beer/cider : $9-$16 (330ml or 500ml)

Basic house spirits: $8-$9
Standard back bar spirits $9-$13

At least mixers are always free here, only thing going for it if you're a spirit drinker.

Jumboman

I wonder how O'Reilly's and MacTurcaills in Dublin city centre are able to sell pints for 3.30 and 3.60 ?

http://publin.ie/2011/sub-lounge-oreillys/

http://publin.ie/2011/macturcaills-2/

Frynge

minidazzler wrote: »

I'd be interested to hear the prices. Give a breakdown; Cork, Dublin, Galway and Donegal? Thanks

There is no breakdown there is the same price for everyone from the brewery

Geuze wrote: »

I would love to hear the exact pre-VAT price of a 50L keg of beer - various brands.

I will get it and put it up later.

Geuze wrote: »

OK, to be clear, can you confirm that pubs get rebates from brewers based on figures like the above?

I suspected as much.

So if a pub pays x + VAT for a keg, and assuming they are a busy pub, they get an annual rebate of (0.14)(x)?

Yes, pubs get rebates based on the amount of business they give the brewery. They also get rebates on the amount of tea and coffee they buy in, this is a some what standard business practice in all sectors.

Consumers also avail of such rebates from there club cards in supermarkets.

rubadub

Frynge wrote: »

The price of a keg in Ireland is the exact same for everyone.

How do you know this? And are you talking only about diageo, I doubt all breweries follow each others accounting practices, and I would be be extremely doubtful that they let this information be known.

Even if the price on the invoice is the same, its a bit of a moot point with all this talk of discounts, rebates, "free" kegs, "free" glasses that I see in other threads.

Jumboman wrote: »

I wonder how O'Reilly's and MacTurcaills in Dublin city centre are able to sell pints for 3.30 and 3.60 ?

They might be getting their kegs cheaper, like how the Aviva stadium planned on importing guinness kegs from the UK as it was cheaper.

Diageo has agreed to slash the price of Guinness to the company which runs the bars in Dublin’s new Aviva Stadium at Lansdowne Road, after the company threatened to import supplies from Britain.

Irish publicans pay €131.66 for a 50-litre keg of Guinness. The ex-duty price of the same keg to the on-trade in Britain is half that, at £54.15 (€66). Even after payment of Irish duty, the cost of importing Guinness to Ireland would be only €99.33 per keg, a saving of 33 per cent.

That is from the sunday business post, so there is one definite case of them charging different prices in Ireland for kegs. I would be very surprised if others did not get deals. e.g. places like the olympia have a very poor selection of beers, I always presumed they got it discounted as a way of advertising or forcing people to try their product.

Jumboman

rubadub wrote: »

They might be getting their kegs cheaper, like how the Aviva stadium planned on importing guinness kegs from the UK as it was cheaper.

Well if they can do it the rest of the pubs should do it.

Geuze

It seems 3% was the growth in absolute op profits, rather than the margin.

Frynge

The prices are
Guinness €142.36
Budweiser €147.34
Carlsberg €147.75
Heineken €149.40
Coor's (30l keg) €89.65
Bulmer's €144.63

The prices for these products are the same across the board (in my experience). But these prices are never paid. First there is a settlement discount of 2-2.5%. There is also the quantity based rebate at the end of the year and as rubadub said there is free glass ware and other equipment provided to give additional discount. On that note Guinness glasses are the only branded glass that we have to pay for.

Geuze

I am assuming that these prices exclude VAT paid by the pub to the brewer.

I am going to knock a cumulative 2% settlement discount + 14% annual rebate off these prices.

I will use keg = 87 pints, to allow 1 pint for wastage (??)

(142.36)(0.84) = 119.58 / 87 = 1.37 per pint effective cost.

Now my local charges 4.00 per pint of Guinness.

Taking 23% VAT off that means 3.25.

Less the 1.37 effective cost per pint means 1.88 gross margin.

Geuze

Summary of 4.00 retail pint of 4.3% Guinness based on above data

Brewer charges 1.37 effective cost per pint, incl 46.7 excise, based on 87 pints to the keg

Pub adds 1.88 gross margin, and 23% VAT is 75 cent

Brewer = 90.3 cent
Excise = 46.7
Pub = 188
VAT = 75 cent

Does that sound correct?

Frynge

Not quite correct since the 14% rebate only goes for the busiest pubs in the country, probably less than 100. Also wastage levels up and down the country are going to go up since diageo removed the crediting of line cleaning wastage.

There is a saying that a barman will get 86 pints from a keg, a good barman will get 88 and a great barman will get 90.

Geuze

Ok, to get the 14% rebate you need to buy 150,000, which is maybe 1,000 kegs or 20 per week?

I will re-do the figures based on 6% rebate and 86 pints per keg.

Rabies

Is Diagio the only or main beer group in Ireland ? Any other competition?

BeerNut

Rabies wrote: »

Is Diagio the only or main beer group in Ireland ? Any other competition?

Heineken is the other big one.

Mick Murdock

Really interesting thread. It does make me wonder how many of my local pubs are still in business - I wouldn't have thought pub food was massively profitable, certainly not enough to sustain such terrible margins on alcohol. Also, why the hell anybody buy/lease a pub in this day and age?

There is definitely a fine line between making a profit and trying to attract customers in the door. I think a lot of publicans lose sight of this and chase the higher profit margin when they really should look for profits through quantity.

What do I know? :rolleyes:

Rabies

Mick Murdock wrote: »

Really interesting thread. It does make me wonder how many of my local pubs are still in business - I wouldn't have thought pub food was massively profitable, certainly not enough to sustain such terrible margins on alcohol. Also, why the hell anybody buy/lease a pub in this day and age?

There is definitely a fine line between making a profit and trying to attract customers in the door. I think a lot of publicans lose sight of this and chase the higher profit margin when they really should look for profits through quantity.

What do I know? :rolleyes:

Living in a country where a range of "substantial meals" is mandatory while a licensed premise is open, makes most small bars owners happy if they can break even on food.

I've worked for people that want busy venues and are willing to sacrifice profit on quiet days if they can appear busy. Result is a steady trade. Happy customers. But high turn over of staff as we pay lower. This bar is tied to a brewery, gets massive rebates. Push out a crazy about of beer and our basic spirits were tied to another alcohol company, more rebates or quarterly bonus stock with them. Does mean our first pours and beers were restricted.

Now working for one of richest business people in her field in New Zealand, but she is all about profit. We don't turn over as much as we could, she want to see profit. We have expensive drinks and an ok trade. I could easily pull another $5k a week in this place, and would only take a slight hit on the end of week $% that she wants.
Staff get paid a bit better here though. This place does not get rebates, no brewery contract. Fully independent. Can stock what I want, but means my keg price for a 50L is anything from $180-$500, not including delivery charges.
We get no bonus stock here

RandolphEsq

Someone mentioned spirits earlier in the thread. Think it is €22 per bottle of Smirnoff wholesale in a box of 12 (from what I recall from seeing it). Once that is purchased all that is required is a glass, ice and a slice of lemon. This is sold at 4-4.50 for a shot and there's probably 20-22 shots in a bottle (spillage, extra- poured etc.). The mark-up is astounding. At least with a keg of beer it needs to be kept in a giant cold-room, the gas needs to be maintained along with the lines. A shot of a spirit is disproportionately expensive compared to a pint.

Sofiztikated

RandolphEsq wrote: »

Someone mentioned spirits earlier in the thread. Think it is €22 per bottle of Smirnoff wholesale in a box of 12 (from what I recall from seeing it). Once that is purchased all that is required is a glass, ice and a slice of lemon. This is sold at 4-4.50 for a shot and there's probably 20-22 shots in a bottle (spillage, extra- poured etc.). The mark-up is astounding. At least with a keg of beer it needs to be kept in a giant cold-room, the gas needs to be maintained along with the lines. A shot of a spirit is disproportionately expensive compared to a pint.

19.7 actually.

RandolphEsq

Sofiztikated wrote: »

19.7 actually.

19.7? That's impossibly exact.

Sofiztikated

RandolphEsq wrote: »

19.7? That's impossibly exact.

700ml bottle, 35.5ml in a measure.

Jumboman

RandolphEsq wrote: »

Someone mentioned spirits earlier in the thread. Think it is €22 per bottle of Smirnoff wholesale in a box of 12 (from what I recall from seeing it). Once that is purchased all that is required is a glass, ice and a slice of lemon. This is sold at 4-4.50 for a shot and there's probably 20-22 shots in a bottle (spillage, extra- poured etc.). The mark-up is astounding. At least with a keg of beer it needs to be kept in a giant cold-room, the gas needs to be maintained along with the lines. A shot of a spirit is disproportionately expensive compared to a pint.

I've seen 1 little bottles of Smirnoff for 20 euro in Tesco also if you go to england you can get two bottles for £20 I'd imagine you can get the same deal up north.

Sofiztikated

Jumboman wrote: »

I've seen 1 little bottles of Smirnoff for 20 euro in Tesco also if you go to england you can get two bottles for £20 I'd imagine you can get the same deal up north.

Then you're liable for import duties.

BaZmO*

Sofiztikated wrote: »

Then you're liable for import duties.

From the UK? Don't think so

-edit Actually, I think you would have to pay duty if the items were bought for resale.

Jumboman

Sofiztikated wrote: »

Then you're liable for import duties.

Do UK bottles of Smirnoff look any different ? I dont see how they would be caught if they bought a few bottles back from the north.

P_1

Jumboman wrote: »

Do UK bottles of Smirnoff look any different ? I dont see how they would be caught if they bought a few bottles back from the north.

I would have thought the Revenue send out inspectors to check the various stamps seals and watermarks.

Rabies

On spirits since its come up, we pay $28-38 a bottle for the house range.
Bottle size will vary, 700ml, 750ml and 1000ml.
Standard pour is 30ml (double) is $8.50-$9 in most bars.
Very expensive here. An Irish standard pour is 35.5ml (single) and its roughly the same price that we pay here.
All mixers are free over here if a spirit is purchased, that includes juice.