# Price breakdown on a pint of beer



## evoke

Hello All,
           I seen a pub 2 weeks ago that could be leased for €42,000 a year. I was wondering does anyone know the break down on the price of beer in a pub. Say for a pint of guiness it is €3.90. What is percentage profit on it?

Then say for a pint of carlsberg cost €4.30. Is there any where on the net i can find out the break down for the price?

thanks

Regards
evoke


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## ajapale

There is an entire branch of accountancy (management and cost accountants) who deal specifically with this type of question.

I advise you to engage with such a professional accountant before embarking on this business opportunity.


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## evoke

thanks for the reply ajapale. But oput of curiosity do you know the break down of a pint. Would be good to know when you are out in a pub giving out about the price.

thanks


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## ajapale

Some discussion here:
[broken link removed]

and try googling for breakdown of the price of a pint. 
This type of discussion is much favoured by farmers and other primary producers and consumers who suspect that the government and other "middlemen" distributers, wholesalers etc are taking a lot from the value chain.

In any case this is not so much a business question as a consumer question. If you like Ill move it to that section.


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## evoke

> Some discussion here:
> [broken link removed]



I was on that thread on boads already. it did not give a good break down of the price of a pint.

I was trying to find it out how much profit a pub can make from a pint. To see if it was a viable venture. Cause a pubs main business is ho9w many pints it sells.

I know the markup on bar food. But can not find anywhere with how much the pub could potentially earn for each pint it sells.

it is more of business question then a consumer question. It would be good to know if i sell so many pints of x in one night i will make x amount of profit from them.

thanks


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## Graham_07

Just on the pint Guinness ( pre-budget) Diageo were charging €136.89 ex VAT per keg. Kegs are 50 Litres ( 11 gallons ) . Revenue historically accept that you will seel approx 84 of the potential 88 pints in a keg. Many accountants would argue a maximum of 80 pints to be sold per keg, allowing for waste etc. That gives a cost of €1.71 ex VAT per pint. At selling price €3.90 gives €3.21 ex VAT. €3.21-1.71 = profit of €1.50 per pint. Thats a gross profit of 51%. The pint of stout would be the lowest profit item normally in a pub so a pub should have a GP% of at least 55%+ ( and that's being very conservative, usually would be more ) 

You need to take in all the anticipated costs an your desired profit for yourself, using at least that GP% and see what level of sales need to be obtained. If that is not being attained or looks not to be attainable then you need to walk away. As others have said, you need to take professional advice from someone familiar with the licensed trade.


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## evoke

thanks Graham for the break down.



> At selling price €3.90 gives €3.21 ex VAT



so the VAT on the guiness is 17.5%?

A grosss profit of 55% sounds very good. Just need to talk to a person that is in the trade to see how this profit works out for them.

thanks


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## Graham_07

evoke said:


> thanks Graham for the break down.
> 
> so the VAT on the guiness is 17.5%?


 
No. VAT on alcohol is 21.5%. 
At a selling price of €3.90 VAT is €0.69. 

Net amount     €3.21
VAT at 21.5%  €0.69
Gross amount  €3.90

If you are starting from the gross amount go €3.90/1.215 = €3.21 (nett)
€3.21 then x 21.5% = €0.69 (VAT)


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## mattman

*Re: Price breakdown on a pint of beer - running a pub!*

I own a rural local pub.

Did the figures tonight as things are getting quiter every day.

I have to sell 46 pints a day before i make anything. I sell at 3.60 (guinness). just on that note, i only sold about 35 today. and weekend trade is all but gone. And yes, i drive some of my customers home to. 

factor in Rates 3600 year, esb 200 month, vat man 1500 a month, oil 200 a month, 87 a week in insurance, car loan 300 a month, rent ZERO(Big one for u there as u are thinking of renting). 

course thats only the tip of the iceburg. There are so many others, accountant, licience, bank charges(about 300 every 3 month), etc etc.

I dont hire anyone, cause it would not make sence. I work everyday from 3pm till somtimes 2am. 

Trust me, DONT lease a pub ! 

I would be better off on 200 a week, and family on the pension (dole). This country is just gone nuts with overheads. unfortunately, our pub has being in the family for 3 generations and I know for a fact unless something crazy happens like cost of living goes down by 30% , I will be closed in 2-3 years. Its just not worth it. Packing shelves in tesco would be a lot less stressfull and I'd be on more money. 

Pity.

m.


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## z107

Mattman - thanks for the info. Very informative.

I often wonder why rural pubs don't change their business plan to fit changing circumstances? We used to go to the pub, but rarely do any more for the following reasons:
1. Cost
2. Booze is fattening, with a dire lack of alternatives
3. Transport (can't drink and drive)

When we travel abroad, we often still visit cafe/pub places and like to eat and have a coffee in a relaxing environment, preferably with no TV.

Have you considered being more non-drinker friendly? serve nice coffees and alcohol free drinks? I'm in Brno at the moment and the alcohol free beer here is amazing! - you can actually drink the stuff. It's like they forgot to take the alcohol out. Unfortunately, not available in Ireland.


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## mattman

business plan to fit changing ciurumatances?

--->Any ideas? 

u dont go to pub anymore for reasons..

--> cost ! 3.65 a pint is not expensive. i worked out i get 1.39 profit a pint (BEFORE ANY costs)..and i told u about those..
boose is fattenin, yes it is and its bad for u in wrong amounts. but only have 3 or 4 would be nice.

yes..transport..thats a biggy..if i start collecting people in there own homes and leaving them back, i have to employ someone to mind the pub when im gone. People just dont like to be picked up. left home yes. Thus, not worth it for me.




umop3p!sdn said:


> Mattman - thanks for the info. Very informative.
> 
> I often wonder why rural pubs don't change their business plan to fit changing circumstances? We used to go to the pub, but rarely do any more for the following reasons:
> 1. Cost
> 2. Booze is fattening, with a dire lack of alternatives
> 3. Transport (can't drink and drive)
> 
> When we travel abroad, we often still visit cafe/pub places and like to eat and have a coffee in a relaxing environment, preferably with no TV.
> 
> ---> non drinker friendly? i live in ireland. People just DONT go out for a coffee and orange or juice. It just not done here on any large scale to our europe friends!
> whats the point in drinking alchol free alochol?? This is ireland....
> 
> i was wrong about the amount of pints i need to sell per day, its 67 a day.
> in saying that i have NO morgage..only personal loans of 250 a week. so i guess that adds up to a morgage i suppose. and those loans are for the business to keep it alive such as cold room loan, car and a few other normal things.
> 
> mattman!
> 
> god, its gona be a tough year. on that note i got another loan out last week to payoff my overdraft. putting my self in more debt just for pride really.
> 
> 
> Have you considered being more non-drinker friendly? serve nice coffees and alcohol free drinks? I'm in Brno at the moment and the alcohol free beer here is amazing! - you can actually drink the stuff. It's like they forgot to take the alcohol out. Unfortunately, not available in Ireland.


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## z107

> --> cost ! 3.65 a pint is not expensive. i worked out i get 1.39 profit a pint (BEFORE ANY costs)..and i told u about those..
> boose is fattenin, yes it is and its bad for u in wrong amounts. but only have 3 or 4 would be nice.


3.65/pint is just the start. When we used to go to the pub, we'd normally get a white wine, some sparkling water, a pint and maybe pringles. This used to add up to over a tenner. Multiply this by 4 and you're not getting much change out of €50. I also have to actually get to the pub and back, so I can leave my car out in your rural pub, or get a taxi both ways. That could be another €30 at least. So a night out, would be at least €80. We could get a nice meal for that, and that's what we do. Actually, we've even cut back on eating out in Ireland, preferring to save our money and get better value abroad.
PS. Just paid 45Czech crowns (€1.74) for 500ml of 12% beer, in a pub here. Proper beer too, none of that fizz so popular in Ireland.


My business plan:
 - Cater for non-drinkers.
 - Ditch the TV - or at least have a TV free zone.
 - make place comfortable, nice lights, seats etc.
 - sell coffees, cakes and a range of alcohol free beers
 - free wifi.


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