How much profit does a pub make on a pint ?

Frynge

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.

When you get away from kegs, pubs start to pay wildly different prices for the rest of their stock. The vodka example you gave is the best. I presumed you ment litre bottle at that price and thought it was expensive. We buy in litre bottles of Smirnoff for approx €15.66 or €19.30 with VAT. but there is places buying bottles for far more than that.

We would be dealing with over 12 different suppliers for most of our stock. The main reason we buy from any of the suppliers is price ( on spirits most suppliers change their prices monthly), after that there might be other reasons such as to make up a target to receive a rebate or because we are stuck and need a certain product ASAP.

If we run low on kegs because of a particular busy night/weekend we might get kegs from a local wholesaler who would deliver it straight away, but they charge a lot more per keg €10-20 extra, also some wholesalers require cash on delivery for any keg sales. Buying in this way will affect the margins on kegs.

Frynge

P_1 wrote: »

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

They do is the simple answer, but some of our suppliers buy in direct from uk market and pay the duty here. There is a stamp/cert type thing on the bottles saying for uk market only but this is covered up once duty is paid in Ireland.

Rabies

If we can (and usually do) we'll eliminate delivery charge when possible. Suppliers expect it and work it in to their cost.


How does the price that I have estimated equate to in Ireland? About right?


edit:
I should clarify. We usually get rid of delivery charge from the wholesalers or the big breweries. Not much we can do about the small craft guys, they can't absorb it.

Big Nasty

GP% on draught beer can be anything from 50-80% but in and around 60% would be the norm. As already mentioned pubs have massive overheads and with trade as bad as it is these days find it difficult to break even charging €5 per pint. A keg of beer is cq. €145 ex VAT, that's €1.64 per pint yet breweries can sell canned / bottled products to the multiples cheap enough for them to retail at €1 per unit while at least breaking even, if not making a profit.

If we want cheaper beer in pubs we need to start looking at the breweries and not the pubs as they can clearly afford to sell to publicans for at an absolute minimum €0.64 less per unit than they already do. That's €56.32 less per keg bringing the average keg price in and around €90 a pop. Pubs maintaining a 60%GP on a pint can now sell a €5 pint for €3 whilst maintaining the same profit margins.

BeerNut

MCMLXXV wrote: »

we need to start looking at the breweries and not the pubs

But we don't buy our beer from the breweries. We have a choice in what we pay at retail, but no influence over the wholesale prices.

Perhaps the pubs need to look at the breweries.

Sky King

In the North lots of pubs buy kegs from the UK because it's cheaper - even through a wholesaler.

BaZmO*

BeerNut wrote: »

But we don't buy our beer from the breweries. We have a choice in what we pay at retail, but no influence over the wholesale prices.

Perhaps the pubs need to look at the breweries.

Exactly. Blaming the customer for prices is just stupid. Maybe if all the pubs hadn't of cosy'd up with the big breweries during the good times they wouldn't be in such a mess.

Big Nasty

BeerNut wrote: »

But we don't buy our beer from the breweries. We have a choice in what we pay at retail, but no influence over the wholesale prices.

Perhaps the pubs need to look at the breweries.

Publicans have little / no influence over what the breweries are charging either.

The point is that the breweries are charging the publican at least 64% more, actually it's almost double if you de-VAT the can / bottle, per unit than they are charging the multiples.

In turn we are effectively boycotting pubs because of the prices publicans have to charge to break even.

BeerNut

MCMLXXV wrote: »

In turn we are effectively boycotting pubs because of the prices publicans have to charge to break even.

Well I'm not. I go to the pubs where the beer is good value and spend my money there.

MCMLXXV wrote:

we need to start looking at the breweries

So by "looking at" do you just mean "blaming"?

Big Nasty

BeerNut wrote: »

Well I'm not. I go to the pubs where the beer is good value and spend my money there.

So do I, but like the vast majority of people I can no longer afford to do so as regularly as I used to.

BeerNut wrote: »

So by "looking at" do you just mean "blaming"?

Yes, yes I do!

If the breweries were charging publicans the same price they do the multiples they would be in a position to sell pints at cq. €3 and still make the same profit. Seems fair to me.

BeerNut

If the pubs made their own beer they could tell the breweries to shove it.

I love ifs, me.

Big Nasty

BeerNut wrote: »

If the pubs made their own beer they could tell the breweries to shove it.

I love ifs, me.

They could but their profit margin would then probably be less.

gramar

While you can buy beer for less than tapwater in supermarkets you don't get the atmosphere/craic that you get in a pub. One of the main reasons I would go to a bar is to enjoy the company of others and the general atmosphere created by the presence of others particularly if there is a match on. As has been mentioned providing and maintaining this space costs money and unless a pub is charging crazy money like 5.50eur or more a pint then it is generally worth it.

power101

Cheapest beer is Tuborg at around 90 cent plus vat per pint. Dearest is guinness at around 138c plus vat.

So Lets say selling Tuborg at €4. This is €3.25 excluding vat. Cost is 90c. Profit is €2.35 and the margin is 72%

Guinness say selling at €4.50. This is €3.65 excluding vat. Cost is €1.38. Profit is €2.27 so profit margin is 62%

Lets say then shots. Cost of 1ltr of Captain is around €20 plus vat. Shot amount is 35ml . This means roughly 28 shots per bottle. Sales value of a shot is lets say €3 incl vat so 2.43 excluding. Average cost of shot is 20/28 so 71c. Profit per shot then is €1.72 and the margin is 70%.

Hopefully this gives OP an idea of the profits that can be made. If you can lower prices and margins to around 55-60% and increase sales you can get further bulk discounts from the suppliers which can add between 5-10% to your margin bringing it back up to where it was before while still maintaining a good price for your customer.

misterdeeds

Jumboman wrote: »

Makes sense how is it that some pubs can charge as little as 3euro a pint ? while others charge over 5euro for the same pint.

Well said, and charge €5 for a long neck beer when 24 of the same bottles in the supermarket is €15.

Big Nasty

misterdeeds wrote: »

Well said, and charge €5 for a long neck beer when 24 of the same bottles in the supermarket is €15.

As explained already in the thread you buy your beer, bring it home and drink it there. You have to clean up after yourself, wash your own toilet, pay for Sky / UPC, etc. Publicans provide you with comfortable surrounding to consume your beer, provide entertainment in the form of music and / or TV. Have to pay staff, insurance, electricity, gas, etc and try make a wage out of it for themselves.

All this when they are paying close to twice what the supermarket is for a unit of beer.

P_1

power101 wrote: »

Cheapest beer is Tuborg at around 90 cent plus vat per pint. Dearest is guinness at around 138c plus vat.

So Lets say selling Tuborg at €4. This is €3.25 excluding vat. Cost is 90c. Profit is €2.35 and the margin is 72%

Guinness say selling at €4.50. This is €3.65 excluding vat. Cost is €1.38. Profit is €2.27 so profit margin is 62%

Lets say then shots. Cost of 1ltr of Captain is around €20 plus vat. Shot amount is 35ml . This means roughly 28 shots per bottle. Sales value of a shot is lets say €3 incl vat so 2.43 excluding. Average cost of shot is 20/28 so 71c. Profit per shot then is €1.72 and the margin is 70%.

Hopefully this gives OP an idea of the profits that can be made. If you can lower prices and margins to around 55-60% and increase sales you can get further bulk discounts from the suppliers which can add between 5-10% to your margin bringing it back up to where it was before while still maintaining a good price for your customer.

Yes but you're only factoring in the one expense to those calculations. Throw in rent/wages/sky/licensing/esb etc and those 70% margins will be taking a pretty hefty tumble

power101

Yes , the exact same as any business. I wasn't trying to show net margins only gross margins .

A normal business would aim for net profit of around 4-5% on total sales after everything including taxes.

Blisterman

It shows how good value a pint of craft beer is in pubs.

A €1 Heineken for €4 is a 300% markup, whereas a high quality €3 craft beer for €6 is only a 100% markup.

And when it comes to costs of production, you'd be looking at €50 a pint if craft breweries had the same margins as the large ones.

Rabies

Blisterman wrote: »

It shows how good value a pint of craft beer is in pubs.

A €1 Heineken for €4 is a 300% markup, whereas a high quality €3 craft beer for €6 is only a 100% markup.

And when it comes to costs of production, you'd be looking at €50 a pint if craft breweries had the same margins as the large ones.

There is a bar near me that has $50 bottles of beer. Sold in a 500ml bottle. They usually sell one or two a week. Mostly shared between 2-3 people. Their craft bottle beer range is fairly big.

Donnie2022

Bump

Where is it at now???