There never seems to be a week goes by without someone retweeting a picture of a pub price list from 1971 with bitter at 11p a pint or something similar followed by the comments on the ‘crazy prices’ of today. I wasn’t around in 1971 and neither was VAT, health & safety and human resources industries, national minimum wage, workers rights, part time staff holiday pay or compulsory pensions so just what does make up the price of a pint?
So what makes up the price of a pint?
First the pub has to buy the beer in. Let’s look at your standard 4.0% pale/blonde beer from a small brewer.
The level of duty does vary from brewer to brewer (a totally different topic) but in general its around £30 duty to start with on a 9 gallon cask. Since I like small brewers to make a living and be sustainable and I also like beer to be of good quality and brewed with quality ingredients – we therefore have to pay for this. Without giving away any trade secrets, small brewers probably need £40 per cask to buy ingredients, brew beer, run a business, deliver a cask and have enough staff to enable them to be moaning on twitter or take a day off. This means the average cask price of a 4% blonde is probably around £70 in free trade. Since casks are 72 pints, for the ease of this blog let’s take a cask beer sold at £72.
Prices vary by pubs and their costs but an average selling price is around £3 a pint (inclusive of VAT) in the pubs around West Yorkshire for this type of beer.
So once we’ve paid the brewer for the beer, we can now work out the gross profit from that pint:
Selling Price £3.00
Less VAT at 20% – 50p
Less cost of pint – £1.00
Leaving a pub with £1.50 in Gross Profit and the government with 92p in tax revenues (excluding all the other taxable items that may have gone into the production and sale of the pint).
What does this then pay for?
Now here I cannot speak for other pubs and their practices, but for us to maintain high standards of service and of product we have to spend time cellaring & conditioning the beer, cleaning the lines and equipment, testing & tasting the products and accept that there will be mistakes in serving the beer or times when we aren’t happy with the beer quality and take it off early. This means we don’t sell all the 72 pints we have bought, therefore adding cost. So back to the price of a pint:
Currently we have £1.50
Less 6.9% waste (Average yield of a cask is 67 pints with waste, cleaning, drip tray / waste, pull through and sediment ullage) – 21p a pint
Less line clean cost based on average waste per clean – 10p a pint
So we are now at £1.19
Again here, I can only speak for ourselves but in order to run a business successfully you need staff, a manager, supervisors & assistants, bar staff, cellar manager, cleaners and glass collectors. Pubs are very different to shops and supermarkets staff wise; in pubs we not only look after the product from ordering to serving but also whilst its consumed and the aftermath. To do this quickly, efficiently and to a high standard our staff need paying as such. They have skills which need training, they also have bills to pay and the job is demanding so need paying what they deserve. Wage costs on average are 88p per pint pulled because for every busy Saturday there is a graveyard midweek shift (plus there is NI, holiday pay & Pensions to pay for as well).
So take this from the £1.19 and we are down to 31p a pint profit.
That’s ok, you say – 31p a pint and you sell thousands a week, still doing well?
Well there are other things to come out of that 31p yet. We have to either rent or pay our mortgage on our properties, we have to heat and light them, paint & decorate them, fix and maintain them. We have to buy, provide and clean the glasses you drink from and replace those customers smash & steal. We have to insure the pubs and insure you lucky punters that come into them. We have to have running water (and have it hot), bins collected and clean the pubs. We have to provide you with facilities such as use of a toilet and you now all expect free WiFi. As a rule people like entertaining so we have free live music for which we pay the artists as well as then the PPL & PRS for that. We also have to maintain our customers safety by testing electrical equipment, having CCTV & fire equipment and ensuring gas & ventilation safety. This is not an endless list of costs that are incurred, there are many, many more and all this comes out of that 31p.
Hopefully though there is something left from that 31p after the overheads. This then goes to head office where the staff also need paying, payroll needs sorting, there is HR and H&S resource for our staff, our suppliers need their invoices paying our council tax needs paying etc..
What’s left the government then takes corporation tax out of and that’s before someone smashes a mirror, breaks a toilet seat or throws stones through your window for the fun of it
This is just some of what makes up the price of a pint for us and the reason why good beer should cost what it does today. So remember next time you think the beer is a crazy price in our pubs just consider – don’t go back to when you could go out, have a gallon, fish & chip supper and trolley bus home for a quid, its not 1971 anymore. Think of it giving much required taxation to the government, think of it of employing 90 local people who will spend their money in the local community, think of it of it helping many other thousands of people who work for, or own over 95% of our suppliers. Why not compare this to your cup of multinational chain coffee who don’t pay duty, tax or look after local communities yet charge more a pint than we do for beer rather than comparing it to 1971.
Cherish pubs and real ale for what it is and value the product. The social aspect of the pub is another blog just waiting to be written.