Price Of Drink In Pubs

Big Nasty · 18-08-2013 07:14PM #1

This isn't a rant thread, or at least not the rant thread you thought it would be.

We all know the pub trade is in difficulty and more and more people are drinking at home and going out less. We all know why too.

Having worked in the bar game for many years and seeing the level of outgoings I know first hand that a pub charging €4 for stout / ale and €4.50 for lager / cider is (in a lot of cases) not doing a whole lot more than breaking even. And those prices are pretty cheap as is. Of course most people scream that publicans are charging us too much and that they have been ripping us off for years and have made their own beds so fook them.

What the majority of people don't realise is that the main breweries are charging the publican more than twice as much per unit as they are selling to the multiples. We've all seen supermarkets selling cases of beer for €20 - €25, lets call it €24 for ease in this topic. If a supermarket can sell a case of beer for €24, or €1 per unit that means even if they are only breaking even they are paying only 81.3c per unit once it's de-vated @ 23%. Yet publicans pay cq. €150 for a keg (ex. vat), i.e. €1.70 per pint from a 50L keg.

Now obviously there are other factors involved, e.g. supermarkets may sell below cost to entice customers in, supermarkets have bulk buying power, breweries have to deliver kegs to individual pubs as opposed to one depot with the multiples, etc. Even still it can't be argued that publicans are paying close to twice as much per unit of beer than the supermarket. Therefore it can be argued that we are being robbed of our social life by main stream breweries, not publicans.

Thoughts?

danotroy · 19-08-2013 02:48AM

Why cant pubs find a cheaper supplier? With the increased proliferation in craft breweries can they not offer a cheaper alternative to the major breweries?

minidazzler · 19-08-2013 03:58PM

danotroy wrote: »

Why cant pubs find a cheaper supplier? With the increased proliferation in craft breweries can they not offer a cheaper alternative to the major breweries?

Because people want Ken, Carl, Bud and Martha. If an enterprising publican buys a fcukton to get a cheaper price and then sells it on, the Breweries will cut them off.

danotroy · 19-08-2013 04:02PM

minidazzler wrote: »

Because people want Ken, Carl, Bud and Martha. If an enterprising publican buys a fcukton to get a cheaper price and then sells it on, the Breweries will cut them off.

yes but in any area with a large educated beer drinking clientele base surely they could go independent? like the Franciscan well in cork alright when i was last there 4 years ago the prices were comparable to ken and bud.

minidazzler · 19-08-2013 04:10PM

danotroy wrote: »

yes but in any area with a large educated beer drinking clientele base surely they could go independent? like the Franciscan well in cork alright when i was last there 4 years ago the prices were comparable to ken and bud.

And if 50 pubs go independant, they don't have a selling point because there's another 49 pubs like that. Publicans are pretty much trapped by the big breweries, without major investment from another source they'll stay stuck.

The big guys, Diageo, Heineken and IDL throw free stuff at you when you open a bar, but a year down the line it can be hard to get glasses for some small bars if they don't do enough trade by the big guys standards.

danotroy · 19-08-2013 04:20PM

would it be an idea to set up an independent vintners federation be set up to help those 50 independent pubs have collective purchasing power? very simplified questions i know.

Big Nasty · 19-08-2013 05:29PM

Also craft breweries charge publicans only marginally more for their product than the macro breweries. This when their cost to produce is something like three times as much per unit.

Tube · 23-08-2013 11:21PM

MCMLXXV wrote: »

Also craft breweries charge publicans only marginally more for their product than the macro breweries. This when their cost to produce is something like three times as much per unit.

No they don't. A keg of craft costs the same as a keg of Carlsberg, and their costs are somewhat offset by tax breaks.

People will pay the prices pubs ask. There is no simple answer as to why they ask them. It can be high rent, high rates, both, or just profiteering.

Unfortunately there is no consumer group in Ireland that represents beer drinkers.

drumswan · 24-08-2013 10:25AM

Tube wrote: »

No they don't. A keg of craft costs the same as a keg of Carlsberg, and their costs are somewhat offset by tax breaks.

People will pay the prices pubs ask. There is no simple answer as to why they ask them. It can be high rent, high rates, both, or just profiteering.

Unfortunately there is no consumer group in Ireland that represents beer drinkers.

Um, beoir is a consumer group which represents beer drinkers.

Big Nasty · 24-08-2013 07:21PM

Tube wrote: »

No they don't. A keg of craft costs the same as a keg of Carlsberg, and their costs are somewhat offset by tax breaks.

People will pay the prices pubs ask. There is no simple answer as to why they ask them. It can be high rent, high rates, both, or just profiteering.

Unfortunately there is no consumer group in Ireland that represents beer drinkers.

Craft breweries might charge the same but craft beer costs close to 3X to produce. Not because they're using some special elixir, just down to volume.

Pubs are charging the prices they're charging because they have to to try and break even. People aren't paying them, well a lot are but a lot more are staying at home because they can buy beer from the multiples for a fraction of the price.

Anyhow, the point of the thread, in case you missed it, is that macro breweries are selling beer at close to 2X to publicans than they are selling it to the multiples. Hence why we pay so much for a pint in a pub.

To be fair, if the macros matched what they're charging the multiples to publicans there's no way craft breweries could match it.

drumswan · 24-08-2013 10:50PM

Whats a multiple? A supermarket?

minidazzler · 25-08-2013 04:03AM

drumswan wrote: »

Whats a multiple? A supermarket?

A group of bars or off licences that have a much higher buy power than a guy out on his own.

my my my · 25-08-2013 04:13AM

the price of drink in pubs is untenable

Big Nasty · 25-08-2013 05:35AM

minidazzler wrote: »

A group of bars or off licences that have a much higher buy power than a guy out on his own.

It's a supermarket.

Heroditas · 25-08-2013 10:34AM

my my my wrote: »

the price of drink in pubs is untenable

When I started college in '92, I was earning £2.50per hour in a newsagent, the price of a pint was similar.
Minimum wage today is over €8 per hour yet pints in most places are about €5.

What's hurting pubs in some cases is the differential between off-licence prices and pubs.
Back in '96, I remember yellow pack lager being 99p a can or 79p on special offer. Ten cans, pack of fags and some crisps for a tenner!
99p for absolute muck - that's €1.27!
You can get the likes of Carlsberg, Heineken etc for that price now or even cheaper!
Prices for cans of the big brands have fallen in relative terms, as has the price of the pint, compared to 1992 levels. However, it's the differential between off and on-licence prices that has dramatically changed.

Zebra3 · 25-08-2013 12:23PM

drumswan wrote: »

Um, beoir is a consumer group which represents beer drinkers.

Looks more like a group that supports micros to me.

Different thing altogether.

bladespin · 25-08-2013 12:31PM

I'd tend to disagree, it's not so much the difference in price between the pub and the off licence, it's simply the cost of a night out, as a couple with kids we go out very little nowadays but when we do there's generally not much change from a hundred euro (between drinks, taxis, club admission, take away etc), we just can't manage that regularly anymore.

Sit in with a few cans (cheap or otherwise) and you'll notice a massive saving.

The only thing that would tempt me back on a regular basis would be a massive reduction in price (not saying this is possible in anyway).

Also, it does seem that when every other retail sector - clothes, groceries, toys, you name it, have been reducing prices the pubs have steadfastly refused - at least where I live, a pint is more expensive now than at the height of the boom - can't understand that.

Leroy42 · 25-08-2013 12:35PM

It is true that it is really the price difference in on/off trade that is causing the problem rather than the price of the pint itself.

When a customer can walk into the Petrol station and get a bottle of Hein/Bud or whatever for €2, and then walk into the local pub and be charged €5 for the exact same bottle then there is little wonder that consumers question the value.

It appears that publicans have not even tried to adjust to this new position. Telling customers that its rent/wages/brewery prices etc is a waste of time. The customer doesn't care. Just ask HMV/bookstores/xtravision etc. It is up to the business to be competitive, while the customer may be willing to pay a premium for certain things there is a limit and it appears that that limit has been reached and crossed for many people.

Can the pubs survive? Yes, if they start to operate in the industry that they now find themselves in. No, if they continue to believe that somehow people will return to them.

Big Nasty · 25-08-2013 01:44PM

Leroy42 wrote: »

It is true that it is really the price difference in on/off trade that is causing the problem rather than the price of the pint itself.

When a customer can walk into the Petrol station and get a bottle of Hein/Bud or whatever for €2, and then walk into the local pub and be charged €5 for the exact same bottle then there is little wonder that consumers question the value.

It appears that publicans have not even tried to adjust to this new position. Telling customers that its rent/wages/brewery prices etc is a waste of time. The customer doesn't care. Just ask HMV/bookstores/xtravision etc. It is up to the business to be competitive, while the customer may be willing to pay a premium for certain things there is a limit and it appears that that limit has been reached and crossed for many people.

Can the pubs survive? Yes, if they start to operate in the industry that they now find themselves in. No, if they continue to believe that somehow people will return to them.

You're missing the point. Breweries are charging publicans cq. €1.70 for a pint. Shops are getting cans / bottles of beer from the same breweries for less than a euro.

Breweries dictate to publicans the price, there is no negotiation on this but they will get a rebate for certain amounts of volume. Still doesn't bring it remotely near what the breweries are selling to shops for.

Aviva stadium kicked up about this and threatened to buy from the UK where they could buy the same stock for half the price. Diageo reduced their prices to Aviva due to their purchasing power but did nothing for the ordinary publican.

Leroy42 · 25-08-2013 03:55PM

I get the point you are making, it is just that for the customer it is irrelevant. Customers don't pay based on the cost base, they pay based on perceived value for money. If the mutliples and even Aviva can negotiate better prices then basically the pubs are being priced out of the market. They either need to negotiate a lower price or come up with something to differentiate themselves. The VFI should be using their grouping to demand lower prices if that is the case. Trying to pass on the higher costs to the customers is bound to lose customers.

And to be honest, publicans crying that they have to pay over the odds rings a little shallow when for years, and still today, they charge €2 for a can of coke.

Clearly many pubs have seen the changes and now offer food etc, but with the drink driving etc it would make sense to offer free cordials (one for every 3 other drinks or if >50€ spent all night all cordials will be free or whatever) you would then possibly get more people out to the pub.

Complaining about how hard business is is not going to sut any mustard with 400+K people out of work.

Heroditas · 25-08-2013 05:10PM

To be honest, it's not the price of the pint that bothers me.
What bothers me is the blaring music or every square inch of wall festooned with TVs showing Sky Sports News or some obscure football match on Sky Sports 3..... or worse of all, the muck masquerading as food and toilets that I wouldn't even allow a pig use.
There's plenty of pubs even in Dublin with disgraceful toilet facilities. Stag's Head is one and the men's toilet downstairs in O'Neills seems to have been out of action for ages. The one upstairs is rotten.

Lucena · 30-08-2013 02:05PM

Yeah, the telly thing gets right on my t1ts. Worst I ever sew was an Irish pub in Brussels (Big Oak or something like that) for a table quiz night where they had at least five screens scattered about the pub, all showing Sky News on mute.

What sort of a ****e atmosphere is that? I must be getting old though, most people don't seem to mind, or maybe they just put up with it and don't say anything.

Loire · 30-08-2013 02:19PM

How about reducing the "pint" to 450ml and charging e3.50?

Big Nasty · 30-08-2013 02:23PM

Loire wrote: »

How about reducing the "pint" to 450ml and charging e3.50?

How about breweries charge publicans the same rate they do the shops and pints could be sold for less than €3!?!

hfallada · 30-08-2013 02:25PM

Im pretty sure a stadium in Ireland realised it was cheaper to buy the beer from the uk and pay the customs duty here. The breweries here, then cut the price so the stadium would continue to buy the beer in Ireland.

Irish pubs should be like spar or centra and buy in bulk together so they can get a discount

Plus OP if bars without cover charge can charge €3 for a pint. It shows they are getting alcohol a lot cheaper than you think they are

minidazzler · 31-08-2013 01:39PM

hfallada wrote: »

Im pretty sure a stadium in Ireland realised it was cheaper to buy the beer from the uk and pay the customs duty here. The breweries here, then cut the price so the stadium would continue to buy the beer in Ireland.

Irish pubs should be like spar or centra and buy in bulk together so they can get a discount

Plus OP if bars without cover charge can charge €3 for a pint. It shows they are getting alcohol a lot cheaper than you think they are

Groups of bars would do that. Fitzgeralds in Dublin and Reardens on Cork do. But the small rural pubs just can't and other independent pubs in cities would need to hire someone to co-ordinate orders anyway which could kill the profit in it. Never mind the need for storage.

Big Nasty · 31-08-2013 02:14PM

There was a kind of co-op set up years back to try and do this and Diageo refused to sell to them IIRC.

Geuze · 31-08-2013 03:47PM

Yes, there was, I can't recall the details. It was an early internet-type buying group for pubs??

The two dominant brewers in Ireland exploit their size and power, as expected, by charging much higher prices to their Irl pub customers. They charge less into export markets.

I recall Showerings admitting that when they launched Magners in NI, they expected lower prices and margins than RoI sales.

The Aviva stadium caterer is another example of lower trade prices in UK markets for beer brewed in Dublin.

Could pubs join forces and buy from NI or GB keg wholesalers??

Geuze · 31-08-2013 03:55PM

The arrival of JD W into the Irish market, see other thread, will be interesting.

How may the RoI suppliers react?

Will JDW use their own UK supply chain?

Or will they buy off local RoI suppliers?

What will their pricing strategy be like?

In their pubs, they have offers like burger + pint for 6-7 stg, that should mean 10 euro approx......

Will they sell cask ale?

They have a double offer on spirits, I think it's an extra 1 stg to get a double...........

Big Nasty · 31-08-2013 04:14PM

Geuze wrote: »

Or will they buy off local RoI suppliers?

At current rates? Like fvck they will!

While I wouldn't darken the door of one I'm actually glad to see JDW enter the ROI market. Bit of competition never did anyone no harm.

irish_goat · 31-08-2013 05:04PM

Great news I think. Hopefully they'll sell Irish beer.

Price Of Drink In Pubs

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