July 18, 2005
Well under a quid
Nobody likes to feel ripped off. And a lot of people do, when they drink soft drinks in pubs. But, is this fair? Everyone seems to assume that because there's no tax on soft drinks, they should cost significantly less than beer.
Now, first of all, let me make a suggestion — if you're thirsty and can't bear to part with £2 for a pint of coke in a pub, I suggest drinking cordial with soda water. Most pubs will charge well under a quid for a pint of blackcurrant and soda; if you're feeling flush, consider asking them to put a small dash of lemonade in it as well, it tastes lovely.
That settled, what does a pint of coke in a pub actually cost? Well, to you, around about £2. To the pub, the syrup to make that pint of coke has probably cost £35 for a bag-in-a-box of syrup, which gets diluted 5.4:1 - apparently that's 141 16oz servings of coke in an ideal world, which I'm going to call 105 pints1, after you allow for what ends up in the drip trays behind the bar and so on. So, the syrup mix in your pint alone costs 33p. Then, there's the cost of having someone come out to maintain the dispenser, to fill up the gas cylinders, and the (marginal, admittedly) cost of the water. It wouldn't surprise me if this lot took the price to 50p on a pint of coke. Now consider that, of your £2, 30p is lost straight away as VAT.
So, £1.70 goes to the pub, who lose 50p of that straight away on supplying the drink. The rest has to pay for the glass you have the coke in (and replacing the glass when it breaks), the ice (and maintenance of the ice machine) you have in it, the slice of lemon, the bendy plastic straw, the staff to serve you the drink, to collect your glass, to wash the glass before it gets reused, to slice the lemons, to collect the ice from the cellar, to supervise the people doing all of the above, to organise their wages and make sure their tax is correct... and then, at the end of it all, it would be nice if the pub could make a profit, don't you think? It might encourage people to continue to run pubs.
Compare this to a pint of, say, Grolsch, in my local. As I understand it, he effectively pays about £1.14 a pint for his barrels of Grolsch, which then retails at £2.35 a pint. 35p of this is presumably VAT, so his "margin" is 86p, compared to £1.20 on the coke example. So, sure, the margins on coke are bigger, but not as significantly as some people would have you believe.
If anyone has any better figures on this stuff, I'd be interested to see them. I only started looking into this to see who was right out of the people who told me "coke in pubs is a rip off, it costs them something like 2p/litre", and the landlord who told me that he actually saves money by just having 2 litre bottles from Tesco behind the bar, instead of a postmix machine (so, he's paying about 50p a litre upwards, depending what offers are on). Turns out the truth is somewhere in between.
1 This is assuming 20oz == 1 pint; I'm not too hot on this Imperial stuff, so if somoene knows better please shout!
Posted by James at 03:35
Tags for this entry: drinking
rants
economics
You can now subscribe to RSS of comments on this entry or RSS of all comments on this site.
Comments
Where are you including the non-VAT beer tax there, in the £1.14?
Some maths here:
Posted by: jdc at July 18, 2005 08:08 AM
I don't often go into pubs, but when I do, I always just drink plain tap water, which they tend to give away for free. Which is fairly good value, all told.
Posted by: Rachel at July 18, 2005 01:42 PM
jdc, did you see the bit where I linked to that URL already? :) And, yes, all taxes are included in the £1.14 paid by the pub, as far as I know.
Rachel: yes, tap water is pretty good value, although some pubs will be slightly peeved if you sit there all night drinking only that (and I think rightly so, since they still incur plenty of costs in doing so...)
Posted by: James at July 19, 2005 12:49 AM
IME, they generally don't mind so long as you're in there with a reasonably sized group of people who are drinking things that they're paying for.
Posted by: Rachel at July 19, 2005 03:20 AM
Post a comment
If you have an OpenID, you can use it to sign in here. Note that Livejournal users can enter the URL of their journal here, and things should work. Let me know of any bugs, this is new!