The Pub trade is dying - Minimum price for Alcohol?

Capt'n Midnight

tails_naf wrote: »

Is it really below cost selling though?
Cheapest I've seen a can of beer for is a euro.

Lidl were doing two for €1.50 a while back

The beef seems to be that pubs are upset at supermarkets selling brand name alcohol below the cost the the pubs are charged by the distributors.

The price of alcohol in supermarkets, even on specials is high enough to cover all taxes, production and delivery costs with a healthy profit to boot. The only question is how much of that profit is split between the supermarket and the distributor. It could only be below cost if the the distributor was charging so much that they were abusing their position as a monopoly, in which case the pubicans should not be asking for a minimum price they should be reporting this to the revelant authority . ( see earlier post about how it's cheaper to re-import Guinness from the UK etc.)


Until we see a flare up between the distributors and publicans we can only assume that the publicans have utter contempt for the public and view them as a soft touch.


We have someone like ardinn selling a pint for just over €3 and in the city centre there are pubs that charge another €2 more. Says a lot when one of the cheaper pubs in the city centre is Rí Rá

mikemac

bungler wrote: »

Was out the other night and asked for a vodka and redbull the drinks were brought over a few mins later and i got the vodka with a can of Boost and they charged me €3.75 for the boost and marked on the can itself was 99c. they sell this boost in my local spar and obviously the manger/owner bought a load of it and tries to charge me nearly 4 times the price.

I'd take it back. If you specify a brand then you either get it or the barman will explain it to you.

When I worked in bars, lots asked for Smirnoff Vodka and it was never a problem. If you want a brand you'll get it

Selling Spar Boost isn't on

Degag

feelingstressed wrote: »

I'd take it back. If you specify a brand then you either get it or the barman will explain it to you.

When I worked in bars, lots asked for Smirnoff Vodka and it was never a problem. If you want a brand you'll get it

Selling Spar Boost isn't on

I remember one night and this woman complained about us selling cheap vodka. The brand was Boru and was actually more expensive than Smirnoff!

mikemac

Proof that marketing works

We had the same with Huzzar Vokda, customers calling it cheap ****e.
It was a bit cheaper to buy in then Smirnoff but not by a huge amount

keithm1

tails_naf wrote: »

Is it really below cost selling though?
Cheapest I've seen a can of beer for is a euro.

In other countries (usa, germany, poland, etc), you can buy beer for that easily, IN pubs!

So are our publicans being ripped off - i.e. are they really paying more than a euro for a pint themselves? I find that hard to beleive.

The pubs are a victim of their own policies, prices have been going up and up. It's a joke that I can get a guinness cheaper in ANY other country than I can in Dublin.

If you jack everyone around for long enough, they will vote with their feet, and they have. And now the publicans solution is to want to raise prices in the shops!

They need to take a long hard look at themselves and maybe bring some value back into going out, and then it might become more attractive to the public once again.

Top post publicans take note

Degag

feelingstressed wrote: »

Proof that marketing works

We had the same with Huzzar Vokda, customers calling it cheap ****e.
It was a bit cheaper to buy in then Smirnoff but not by a huge amount

And i can guarantee that 99% wouldn't notice the slightest difference in taste. It actually annoys me when people ask me for "Smirnoff," not only because it's the only Vodka we stock, but also on busy nights with music blaring, you presume they want Smirnoff Ice. Headwreaking stuff!

Degag

tails_naf wrote: »

So are our publicans being ripped off - i.e. are they really paying more than a euro for a pint themselves? I find that hard to beleive.

The pubs are a victim of their own policies, prices have been going up and up. It's a joke that I can get a guinness cheaper in ANY other country than I can in Dublin.

Keg of Guinness costs about €130. Keg of Lager about €150. Work it out for yourself.

Also, their are planty of cities where Guinness costs more than Dublin. Paris, Oslo, Helsinki and so on.

ardinn

Capt'n Midnight wrote: »

Lidl were doing two for €1.50 a while back

The beef seems to be that pubs are upset at supermarkets selling brand name alcohol below the cost the the pubs are charged by the distributors.

The price of alcohol in supermarkets, even on specials is high enough to cover all taxes, production and delivery costs with a healthy profit to boot.

Are you for real - OH my God - Is that what people think!!!

Its called a loss leader - They buy if for the same as we buy it add the tax and then proceed to lose about €15 on it - They sell it this low so people will walk in their doors.

If a case of miller costs me €30 it also costs them €30 - they just sell it at €15.

Please dont state things as fact when they are not.

macquarie

ardinn wrote: »

Are you for real - OH my God - Is that what people think!!!

Its called a loss leader - They buy if for the same as we buy it add the tax and then proceed to lose about €15 on it - They sell it this low so people will walk in their doors.

If a case of miller costs me €30 it also costs them €30 - they just sell it at €15.

Please dont state things as fact when they are not.

Look at the end of the day customers and the general public are just not willing to pay the prices that pubs charge these days. If that means going to your landlord, electricity supplier, drink supplier, bar staff, sky, etc and negotiating costs/rates/rent/wages/etc with them then so be it. If that means closing the pub then so be it.

But there is one thing myself and everyone on boards.ie can assure you, that banning supermarket below-cost selling to maintain current drink prices in pubs WILL NOT WORK.

sandmanporto

i think irish publicans are as greedy as irish politicians. I also know of sum bar owners who kept the price of a pint at €5 after the gov relieved alcohol tax!! Greedy f_cks! Other places were chargin €4.70! In poland, you get a larger drink of beer than a pint for €2. I just think its in the nations nature to be greedy! In fact i questioned the bar owner over why he didnt lower his prices and he answered, 'do you wanna get barred!'

benjamin d

http://greatbrewers.com/beer-profit-calculators

This is handy for doing sums. Its an American site so I'm using dollars.

Using this I worked out that selling 20oz glasses(more than a pint) from a $200 keg(surely top end price for a keg?) at $4 gives over $165000 profit over the year at 100 kegs a month(just over three a day - averaged over weekends and weekdays this is not very busy at all).

Same with bottles - even if a case of 24 costs $50 (which it doesn't), selling at $3 a bottle gives a profit of $22 a case. If you're selling, say, 15 brands of longnecks (a moderate figure really) you should be looking at getting through a fair few cases a day.

I know costs/overheads can be very high but there is still healthy profit to be made in the pub trade and plenty of room for drink prices to be lowered.

I think a lot of the people who paid stupid money for bars/clubs during the boom, and those who went mad spending money on their place that now have huge loans to pay will go to the wall, leaving the ones who were a bit more sensible in their spending to lead the industry forward. The only way to revive the pub trade is to get seriously cheaper, no matter what anyone says, but to do that potentially up to 50% of the bars in the country will close.

I think what will happen is that we will end up with much fewer, but much cheaper pubs within a few years.

Oroel

mahamageehad wrote: »

To be fair the only reason that ryanair can afford to sell such cheap flights is because they add ridiculous charges- €6 for online check in and no other option! €5 administration charge for using for credit card! And they absolutely rape you on name change fees (€100) and last minute flights!!! It's completely different to pubs- they can't say if you order in advance it's €4 but you waited till the last minute so it's €12.

I don't think anyone is really expecting the pubs to sell for less than cost price but i'm sure the profit margins could be reduced significantly.

oh my god the airline rape you?
what?

HellFireClub

ardinn wrote: »

Are you for real - OH my God - Is that what people think!!!

Its called a loss leader - They buy if for the same as we buy it add the tax and then proceed to lose about €15 on it - They sell it this low so people will walk in their doors.

If a case of miller costs me €30 it also costs them €30 - they just sell it at €15.

Please dont state things as fact when they are not.

I don't run with this theory at all... First of all, there's no actual evidence whatsoever that there is below cost selling going on here.

The supermarkets can negotiate massive discounts on the basis of big volumes, they might not be making as much on the bottles of alcohol as they make on other stuff like wines or meat, but I don't think it's credible anymore to be making big pronouncements to the effect that supermarkets are paying price A for something and selling that product for price A less amount B.

Also, while they are probably making very little on each bottle, they are shifting big quantities of bottles, so a small margin multiplied by a big number of bottles being shifted, can deliver a respectable profit, something that the publicans need to wake up to... If the supermarkets were marking up their bottles of Millar by 600% plus, nobody would be buying their alcohol!

ardinn

HellFireClub wrote: »

I don't run with this theory at all... First of all, there's no actual evidence whatsoever that there is below cost selling going on here.

The supermarkets can negotiate massive discounts on the basis of big volumes, they might not be making as much on the bottles of alcohol as they make on other stuff like wines or meat, but I don't think it's credible anymore to be making big pronouncements to the effect that supermarkets are paying price A for something and selling that product for price A less amount B.

Also, while they are probably making very little on each bottle, they are shifting big quantities of bottles, so a small margin multiplied by a big number of bottles being shifted, can deliver a respectable profit, something that the publicans need to wake up to... If the supermarkets were marking up their bottles of Millar by 600% plus, nobody would be buying their alcohol!

No because they would be dearer than bars???

You seem to be saying that all the below cost stats are false and that the VFI are lying when they say that the multis are charging below cost and are actually making money and the supermarkets have no problem with this lie being spread?

Beer is cheaper than water at the moment - And you think that that the costs involved are actually less to produce?

ardinn

tails_naf wrote: »

So are our publicans being ripped off - i.e. are they really paying more than a euro for a pint themselves? I find that hard to beleive.

Yes they are - nearly €2 per pint to be exact.

ardinn

Degag wrote: »

Keg of Guinness costs about €130. Keg of Lager about €150. Work it out for yourself.

Also, their are planty of cities where Guinness costs more than Dublin. Paris, Oslo, Helsinki and so on.

No your wrong,

A keg of guinness is nearly €160 and Lager €180 + vat

Why are people starting to make things up in here?

I am going to find it hard to continue discussing this when people start making up their own facts to suit their own arguments!

macquarie

ardinn wrote: »

No your wrong,

A keg of guinness is nearly €160 and Lager €180 + vat

Why are people starting to make things up in here?

I am going to find it hard to continue discussing this when people start making up their own facts to suit their own arguments!

You have to view this from a customer's point of view - we couldn't care less about the costs of running the business, I don't go into my local Tesco and say "ah sure I don't mind paying more for product X here than in Lidl, Tesco need to justify higher rents/staff/whatever" - customers just see 2 things:

1) Product
2) Price

If the product has a lower price in shop X than Y, we go to shop X.
If the product is too expensive in both shop X and Y, we don't purchase it.

Alcohol is a luxury product at the end of the day.

And it's really as simple as that. The costs of running the business itself are for the directors and management to worry about, not the customers.

maninasia

Pubs should band together and negotiate a group discount with suppliers. They should also think about other ways to get the punters in and stand out from the crowd. Finally Ireland probably has too many pubs, they can't all survive.

mikemac

I wonder will we ever see pub chains making a go of it in Ireland though now is not a great time.
Though the top businessmen don't follow the herd so possibly somebody thinks it is a good time

The likes of Wetherspoons have huge buying power.

Ok, a lot of people aren't fans but it's an alternative and something different.
Had barfood in Enniskillen and Belfast, it's quite good and cheap

I remember they were planning to open in Capel St in Dublin but it fell through, I'm unsure why.

Again, it's an alternative and might kickstart something

senordingdong

benjamin d wrote: »

[I know costs/overheads can be very high but there is still healthy profit to be made in the pub trade and plenty of room for drink prices to be lowered.

I think what will happen is that we will end up with much fewer, but much cheaper pubs within a few years.

By and large I would agree with that, but we have to keep in mind that the pubs are getting ridden in the same way every joe soap is.

It's funny what you say about less pubs giving us an overall better price, because traditionally, less variety leads to higher prices.
Which makes you wonder why there is such little variation in prices amongst Irish pubs.

Ardinn wrote:

I am going to find it hard to continue discussing this when people start making up their own facts to suit their own arguments!

We've no reason to believe you over him, unless you want to scan your invoices?

feelingstrssed wrote:

Re:Witherspoons

I myself have heard two reasons for this.
The first was that publicans rallied to the TDs to make sure a license wasn't issued.
The other was that Wetherspoon & co felt operating costs here were far too high.

The only sources I can find online suggests that they had already bought their premises, (old Bargaintown on the quays I presume) and then acknowledged the difficulty of obtaining a license, while still commenting on the costs of operating here...but that article is dated 2003.

http://business.timesonline.co.uk/tol/business/article1117256.ece

rubadub

ardinn wrote: »

Are you for real - OH my God - Is that what people think!!!

Its called a loss leader - They buy if for the same as we buy it add the tax and then proceed to lose about €15 on it - They sell it this low so people will walk in their doors.

If a case of miller costs me €30 it also costs them €30 - they just sell it at €15.

Please dont state things as fact when they are not.

How do you know this, you are the one stating facts too BTW. as I said earlier

rubadub wrote: »

But some pubs are buying from supermarkets, it has come up in consumer issues a few times when people spotted mulitpack bottles. What is stopping them buying from the same place as these offies. I know of a few offies attached to pubs which have very good deals which rival tesco's prices.

People are mentioning supermarkets selling below cost -how do they know this? do they know the price they pay? They say they are selling other products to make up the loss but what about O'Briens and other offies? they often have prices in line or lower than tesco. My local O'Briens had cans of heineken 24 for €25, I doubt this was below cost selling. The local centra had 20 heineken for €15, I know many people who got them, not a single one did any other shopping in the centra -I doubt they were selling below cost.

So why can they not get them from the same supplier. And why not sell cans, in the last year I was in the summit pub in howth and they had cans of heineken, a restaurant in dublin had cans, and a pub in enniscorthy sold cans.

And once again I will mention diceys pub in dublin sell drink below cost.

I will mention for the fourth or fifth time that diceys appear to sell paulaner below cost -and would like to hear your opinion on that.

I find it literally incredible to these small off licences and shops like centra as selling at as big a loss as you are making out.

You said heineken cost you €35 for a case, is this including VAT? even if not that is €29 for 20 bottles, now if centra get it at the same price they are making a loss of €14 per case, and not a single mate of mine bought other stuff in centra, not even a bar let alone a weekly shop.

senordingdong

rubadub wrote: »

You said heineken cost you €35 for a case, is this including VAT? even if not that is €29 for 20 bottles, now if centra get it at the same price they are making a loss of €14 per case, and not a single mate of mine bought other stuff in centra, not even a bar let alone a weekly shop.

Want to give a resounding +1 on this.

Just using boxes of bottles as an example, the cases the supermarkets buy is different then the cases the publicans buy.

maninasia

feelingstressed wrote: »

I wonder will we ever see pub chains making a go of it in Ireland though now is not a great time.
Though the top businessmen don't follow the herd so possibly somebody thinks it is a good time

The likes of Wetherspoons have huge buying power.

Ok, a lot of people aren't fans but it's an alternative and something different.
Had barfood in Enniskillen and Belfast, it's quite good and cheap

I remember they were planning to open in Capel St in Dublin but it fell through, I'm unsure why.

Again, it's an alternative and might kickstart something

I don't think they need to be 'chains', Wetherspoons are miserable places, the food is poor quality too. All the pubs need to do is join together as a purchasing 'co-op' and negotiate together to make purchases. They pay a small fee to be part of the co-op.

MagicSean

I think the pubs are screwing themselves by charging so much for soft drinks and even flavoured water. And whatever about the margin on alcohol from the kegs you can't say they don't make a nice profit on selling litre bottles by the short. i think they need to seriously review their pricing systems. i stopped going to pubs because i don't drink and a night out was still costing a fortune.

tails_naf

ardinn wrote: »

Yes they are - nearly €2 per pint to be exact.

Well the VFI should be doing something about it then, rather than putting out crappy ads on the radio, and complaining to the govt to tell Tesco to raise their prices.

I'm sure there are plenty of other beers (nice ones too) around the world that would only be too happy to sell to Irish pubs in bulk for much much less than €2 a pint!

senordingdong

tails_naf wrote: »

Well the VFI should be doing something about it then, rather than putting out crappy ads on the radio, and complaining to the govt to tell Tesco to raise their prices

Yeah, haha, this is something that makes me laugh every time I hear the ads.

Degag

ardinn wrote: »

No your wrong,

A keg of guinness is nearly €160 and Lager €180 + vat

Why are people starting to make things up in here?

I am going to find it hard to continue discussing this when people start making up their own facts to suit their own arguments!

Well buddy, i've worked in the trade for a long time and the last docket that i received had Guinness on it for €131.66.

senordingdong

Well here's an idea.

The two publicans here don't seem happy about paying the price they pay for Guinness from Diageo.
A few of them should perhaps pool together and begin ordering it from the UK.
Then they can split the saving with their customers.

benjamin d

senordingdong wrote: »

By and large I would agree with that, but we have to keep in mind that the pubs are getting ridden in the same way every joe soap is.

It's funny what you say about less pubs giving us an overall better price, because traditionally, less variety leads to higher prices.
Which makes you wonder why there is such little variation in prices amongst Irish pubs.

I think this might have something to do with what was mentioned before about the vfi 'suggesting' prices to sell at. Doing this would protect the people with the highest overheads and therefore the highest prices. When the guys with the big debts disappear the rest of the bars will be in a better position to lower their prices without killing the rest.

I know what you say about less variety leading to higher prices, but the way it is now is that pubs have priced themselves completely out of the equation for most people to use with any kind of regularity, so if less pubs equals higher prices then they are definitely screwed.

Less pubs, with lower costs, means cheaper drink imo, if not then the whole industry will go down the pan. Pubs have to adapt or die - the ones who can't afford to change their prices will close, simple as that.

This however will probably just bring the cycle around again - if there are few, but profitable pubs, people will see a market for it, spend huge money starting up, and the whole thing goes again!

benjamin d

tails_naf wrote: »

I'm sure there are plenty of other beers (nice ones too) around the world that would only be too happy to sell to Irish pubs in bulk for much much less than €2 a pint!

I would LOVE for this to happen, but the fact is that the vast majority of people only want their guinness/heineken/carlsberg/pisswater to be sold in their local. You and I and probably a more than average number of boardsies would be all for different beers and a wider variety, but it just doesn't sell to your average man on the street.

I'd love even a British type situation, where two pubs beside each other might have a completely different selection, but the Irish market is so set in their ways of drinking watered down mass market crap that it'll take a long long time to change that.