What makes up the cost of a £6 pint – and how much is profit?

23 comments

1. Interesting that they are allocating £1.76 to the cost of staff to the £6 pint of larger and £2.22 to the £7.50 pint of IPA.

   That seems rather high – is the pub so unpopular that it is empty with the staff having nobody to serve?

2. The wholesale price includes a lot of profit as well, just for someone else.

   I have made my own mead and cider before, it doesn’t cost anything like as much as they list for the price, and I don’t get the savings you would have in buying stuff in massive quantities. I get supplies from Aldi.

3. So many people in the comments who have no grasp of business or the costs in running a venue trying to “Correct” the numbers.

   Why don’t those who dispute the cost in running a pub try an open one?

4. Fundamentally, the problem is duty. The taxes placed on alcohol are driving the prices up, coupled with brexit based material and import costs, are causing prices to go way too high.

5. Wait, why are the fixed costs (rent, staff) higher for the IPA? That makes the whole thing suspect.

   Lets say rent is £1000 and you sell 1000 drinks in the rental period, then the rent cost per drink is £1, if you sell 2000 drinks then its 50p per drink, economy of scale.

   I don’t know what sort of accounting you’re doing if you’re absorbing different amounts of fixed costs into otherwise similar items (pints of lager/ale).

6. For a false pretext of living a long and happy retirement

7. I don’t care how they try and justify it, the prices are still insane and a large reason I don’t go to the pub much anymore

8. I know a GM in London.
   It costs roughly £1.20 a pint and they sell for £7-8.

9. These numbers seem weird.

   Firstly, they are not selling a fixed number of pints per day. They will sell more one week and less others. I guess they have averaged out to get the costs – but surely costs allocated to anything other than price of the actual beer will go down the more they sell.

   Secondly, that a lot for wastage – especially when you also get a yield on some beers (I work in hospitality) and if 5% was wasted on every beer that would be concerning.

10. I used to manage a pub in South London and I think they’ve slightly underestimated the spillage costs (should be closer to 8% with mispours, mistakes and staff drinks factored in) as well as the rent in the price breakdown.

    We were a popular pub with a restaurant and large garden and our revenue was hovering around £3m a year. Rent was £1.25m of that and that was in 2020 so will have gone up from then.

    As others have mentioned, there are other staff that need to be factored into the price eg glassies, Kitchen porters, reception, and security on weekends.

    Drinks also have to make up the majority of the profit margin for the entire establishment as food profit margin is extremely tight (<5%)

    Edit. Rent is by far the biggest driver of pint prices

11. Ignoring the allocation of costs for a moment, the price is up 27% in 4 years, and up 39% in 10 years.

    Someone’s recently started gouging on those figures.

12. They’ve taken someone’s accounts – put in to percentages and then acquainted that to a pint.

    Wage cost %
    Cogs %
    Rent/utilities %
    Profit %
    Tax %

    Then made those percentages of a pint.

13. They say 5% wastage and give a figure that is around 17% of the wholesale cost. Am I missing anything here?

14. Costs me £0.00 to step behind the bar and pour a pint for myself, where is the money going??

15. Guess this is why my town condensed down to essentially only having a spoons. Tbf we a re partly to blame I guess – we used to go the pub maybe 3 times a week if not more and then maybe 2 years ago our habits changed and it went down to once a week. We noticed it was getting more expensive and realised we may as well have people round so that happened for a while. Then that stopped happening as frequently as people had kids and now its essentially just us.

16. I don’t know, but my local does their own real ales for £3 a pint (well £2.95) Guest ales at £3.50 a pint.

    It’s only the likes of Guiness and the premium kegs that are £4.50-5 a pint.

17. 14% profit margin is quite high. Many industries would kill for that margin

18. I used to run a hotel in Cornwall and this article fails to mention that a large amount of hotels/pubs are owned by breweries and then tenanted out to be run by independent businesses. If this is the case the pub/hotel has no choice in who they buy they’re alcohol from, they have to buy from that particular brewery.

    So in 2017 we were buying Heineken for £2.52 a pint from the brewery. As standard out multiple was 4.2 to be able to cover the cost of staff, CO2, utilities, rent, spillage and everything else in between. Thus we should’ve sold Heineken for about £10.60 a pint, obviously we did not sell it for this price, we sold it for £4.40 so people could buy it. This was similar for all alcohol we sold resulted in us making a gross profit but net loss on every drink sold.

    All profit came from the people staying in the hotel and food served in the bar.

    Since I’ve left, that hotel has moved away from being a ‘local pub’ and now focuses on fairly high priced food and rooms for tourist.

    You cant even stand/sit at the bar anymore to stop people from drinking in there. The locals no longer feel welcome.

19. 73% GP on a pint is very high. Industry standard is about 65%,

20. 1.36 per pint.. for staff costs.. that ain’t going to the staff mate..

21. A pint of craft beer for a small brewer costs 1.40 to make. I know as I have a Micro brewery.

    The large brewers will produce the same pint for 60p with economies of scale.

    We retail for £4.20 in our bar.

22. “Most of the world’s barley is produced in *Russia*, followed by Germany, France and *Ukraine*”

    https://worldmapper.org/maps/barley-production-2016

    war in Ukraine is really shafting everyone

23. Value Added Tax is roughly 33% on alcoholic beverages sold in the UK.