The price of Alcohol

[illdecide]

I always knew we were getting ripped off but when i read the following i couldn't believe by how much...


The true cost of a pint
Buy a pint and just 7p goes towards the cost of making the drink, while a £4 bottle of wine costs just 30p to make. So where on Earth is the rest of your money going?

Getting in a few rounds in the pub or splashing out on a decent bottle of wine in a restaurant can leave your bank balance, as well as your head, a little worse for wear the following morning.

Every year drinkers across the UK spend £19.8 billion on beer, £15.4 billion on wine and £8.3 billion on spirits. And prices are only set to increase.

The cost of a pint has been steadily rising in recent years: the Campaign for Real Ale (Camra) says the average pint of bitter costs £2.80 with lager now at around £3.

That's nowhere near the average £6 price tag in Norway, but is a far cry from the 25p you'll shell out for a pint in Tajikistan.

Paying for more than beer
Ian Lowe of Camra says the mark-up on prices varies enormously but estimates this stands at around 55% on the average pint.

However, it's the government that is making the most from the nation's penchant for a tipple: around a third of the cost of a pint goes to the Treasury. For a pint of 4% beer, 37.4p goes in just excise duty, not counting the VAT of 17.5%. This excise duty rises to 50p for a 5% strength brew. In contrast just 7p is spent on the raw materials such as hops and barley.

"Global breweries say they make 1p a pint and it's actually the government that makes more money on beer than brewers and licensees," said Lowe.

Revealed: Britain's best pubs

Not just drinkers paying
Pubs have had a rough ride during the recession: beer sales at pubs are now at their lowest level since the 1930s, down by £650 million last year, with around 50 pubs closing every week as landlords can no longer make ends meet.

Furthermore, around two thirds of the 53,000 pubs in the UK are tied to breweries. This means they have to buy their beer from the companies that own their pubs and this can often force landlords to pay up to 50p more a pint than wholesale prices.

Global breweries are also putting their prices up faster than smaller breweries despite benefitting from economies of scale. Brewing giant InBev UK, which makes Stella Artois and Budweiser, hiked the wholesale cost of a pint by an average of 4p at the start of February, blaming the increase on difficult market conditions and more expensive raw materials.

Scottish and Newcastle owner Heineken, which last month reported a 14% rise in underlying profit for 2009, recently added 4p to the wholesale cost of a pint of beer and 5p to cider as it battles lower sales.

Meanwhile Guinness producer Diageo raised its recommended retail price of a pint by 10p to £3.03 on 1 February.

And increases in wholesale prices, when combined with taxes and the rest, mean punters pay far more. A 1p rise in the wholesale price can lead to a 5p rise in the cost of a pint, according to Lowe.

Video: the decline of the British pub

More costs to come
What's more, the price of booze is likely to rise further as the government tries to claw back some of its massive Budget deficit through yet more tax hikes.

Duty rates on beer have increased 20% during the last two years. In April the rate of excise duty will go up by another 2% above the level of inflation and will continue to do so every year until 2012. This will mean a 5% rise this year based on the Retail Prices Index figures for inflation.

The government is also considering raising VAT from its current 17.5% to 20%. Analysts say these tax hikes could add as much as 45p to the cost of a pint by Christmas - and potentially send many more local pubs out of business as drinkers turn to supermarkets where a four pack of lager costs around £5.

Not just beer
Wine drinkers also face paying more for a bottle after the Budget.

The average bottle of UK wine costs £4.32 with total tax accounting for more than 52% of the retail price. Excise duty for the average bottle works out at £1.61 with another 64p going on VAT. Furthermore, tax on wine has increased by more than 20% in the last two years.

In contrast, the French only pay VAT of around 20% - so this means a cheap bottle of wine costing £2.51 there will soar to £4.26 in the UK. If you're planning on stocking up for a big celebration, that booze cruise to Calais can more than justify the cost of the petrol.

In the UK supermarkets account for more than two thirds of all wine sales; their size and purchasing muscle allows them to buy in bulk and sell at cost or even below cost price if they can recoup money on higher margin items.

How much should you spend?
Spend a few extra pounds and you get a much better quality of grape for your money. Buy a £4 bottle of wine and once you've taken off taxes, a retail mark-up of around 30%, sometimes a wholesaler mark-up of around 20% and packaging costs, the winemaker is left with around 30p to actually make the wine. This means they go for quantity over quality using veritable mountains of cheap grapes.

If you trade up to a £7 bottle the amount of money the winemaker has to produce the wine soars to around £2. This means they can use higher-quality grapes and develop different flavours by ageing the wine or perhaps using oak barrels.

Wine experts say that the best value wine to buy from the shops is between £6 and £9 as a decent amount of your cash goes towards the actual wine.

Restaurant mark-ups
This is definitely not the case when it comes to restaurants. They unashamedly make most of their money from wine: Gordon Ramsay has said he only just about breaks even on the cost of food with profits coming from the mark-up on drinks.

There are various ways restaurants mark-up the cost of a bottle; many tend to double or triple the price they pay. So if you're forking out £20 for a bottle, the chances are they only paid around £7 to £10.

This makes it worse value to go for more expensive bottles of wine as you're paying to line the restaurateur's pockets rather than getting a better quality drink.

A few restaurants don't do this and have flat-rate mark-ups - this makes the more expensive wines better value.

Money spirited away
If you're a fan of harder liquor, however, you could be in for a rude shock in the Budget on 24 March as the government battles to clamp down on binge drinking and, of course, raise extra cash to shrink its £178 billion deficit.

At present, tax makes up almost 72% of a bottle of 70cl spirits at 37.5% proof imported from the EU. Excise duty accounts for £5.94 of the average price of £10.46, with VAT coming in at £1.56. This means you're paying just £2.96 for the product itself.

The drinks industry is bracing itself for spirit duty to rocket after the Budget, far above the 5% increase earmarked for beers, wines and spirits under the government's alcohol duty escalator.

MPs on the health select committee last year called for a return to 1983's level of duty, when a litre of pure alcohol had duty equivalent to 11% of the average male weekly manual wage, compared with 5% in 2002. This could add around £8 to a bottle of whisky or gin, according to the Wine and Spirit Trade Association (WSTA).

However, a spokesman stressed that while the government is being pressured into taking action and alcohol is seen as an easy target, the actual increases coming through in the Budget are likely to be far less.

Time to stop the rising prices
Industry bodies want the tax escalator to be postponed as companies struggle with falling sales and the rising cost of raw materials, energy and transportations. The weak pound is also making imports more expensive.

"Enough is enough. We know the public finances are in difficulty but pushing up prices with higher taxes does nothing to help British consumers or businesses battling to recover from the recession," said Jeremy Beadles, chief executive of WSTA.

The UK's alcohol duties are already much higher than most other European countries but with taxes set to rise significantly further, that after work drink is about to become a lot more expensive.

[Minder]

It would drive you to drink

[delboy]

I always knew we were getting ripped off but when i read the following i couldn't believe by how much...


The true cost of a pint
Buy a pint and just 7p goes towards the cost of making the drink,

The big breweries have economies on scale on their side but you can easily knock out a pint of beer for about twice that ie 14-15p. With the price of drink especially in Ireland im surprised more people don't make their own.

[thebigfella]

I switched off after Camra was mentioned. Bunch of woolie jumper bearded freaks who have nothing better to do with their lives 

[lynchbhoy]

good news about 2009 bordeaux vintage (after three years of poor enough quality wines 2--6- 2008) its going to be nearly up there with the fantastic 2005

- from berry brothers and rudd wine merchants-
Bordeaux 2009 – First Glimpses

Simon Staples and our buying team have just returned from a week in Bordeaux tasting the eagerly anticipated 2009 wine vintage en primeur. They visited 55 châteaux, tasted over 500 different wines and their conclusion is that Bordeaux 2009 is a brilliant vintage in which certain châteaux have crafted truly exceptional wines that match, and in a few cases eclipse, their amazing 2005's.


Bordeaux 2009 - Wishlist

If you would like to pre-register your interest in certain wines we have created a Bordeaux 2009 Wishlist. Although the châteaux have not released their prices, you may already have an idea of which wines you would like to buy from the hotly anticipated 2009 vintage.

Click here for more details:

http://www.bbr.com/fine-wine/bordeaux-2009

[lynchbhoy]

buying en primeur might be a better option than stocks, shares or bank investments, so maybe I should post this on one of the financial threads !

[Denn Forever]

If Carlsberg did strikes...... oh wait they have.

I'd hate be working in the warehouse after the forklift drivers had a few.

New rules at Carlsberg lead to workers strike
Posted by Staff on Apr 9th, 2010 // No Comment

Danish brewing company Carlsberg saw hundreds of employees walk off the job in protest on Thursday after the company changed a long standing policy towards drinking on the job. Since the brewer opened its doors in 1847, workers have been allowed to drink on the job as much as they wanted, so long as they didn't get drunk. The policy has worked for the company for decades as spokesman Jens Bekke stated that "the only restriction was that you could not be drunk at work. It was up to each and everyone to be responsible". It was not uncommon to see coolers full of beer placed around the worksite with employees free to consume while working.

The company's new policy states that employees are now only allowed to drink beer in the canteen during a 30-minute lunch break. In response to the new policy, hundreds of warehouse and production employees have gone on strike with company truck drivers also walking off the job in sympathy as the new policy does not affect them. Drivers are allowed to take three beers with them from the canteen as they often don't have 30 minutes to sit in the canteen. All of Carlsberg's trucks have alcohol ignition locks, preventing them from being started by drunk employees.

The new policy took effect on April 1 and according to Michael Christensen, a representative from the United Federation of Danish Workers, the employees would have been okay with the change had the company not ignored a long standing agreement to consult with the employees before making changes.

[stew]

The price of drink is ridiculous over there, over here you can buy 30 cans of bud for 20 bucks, I only drink guinness or wine and you can get a good bottle of plonk for about seven dollars. I dont know how youse can afford to pay the prices you do over there.

[Puckoon]

Tis cheaper than crack.

[pintsofguinness]

how much profits would publicans have on drink? I remember hearing before but I can't remember exactly how much, it was a lot!!

[Milltown Row2]

Its crazy that we are paying over the odds for Beer. Its getting too expensive to go out for a meal and wine. We were out last week and spent £70 each on food and drink!!

[Tony Baloney]

Its crazy that we are paying over the odds for Beer. Its getting too expensive to go out for a meal and wine. We were out last week and spent £70 each on food and drink!!

And you brought your own sandwiches.

Ate that's his problem. It's the 65 quid on booze that's the problem, not the fish supper on the way home.

[down6061689194]

how much profits would publicans have on drink? I remember hearing before but I can't remember exactly how much, it was a lot!!

Less than you think.

Profits are eaten up by electricity for pumps etc and Sky and that sort of thing.

[thewobbler]

Profits are eaten up by electricity for pumps etc and Sky and that sort of thing

Yep, try paying £400 p/m for Sky Sports, £160 per night for a two-piece band, and public liability insurance to cover all the tramps of society, and see how many pints you have to sell before you start turning a profit. And that's before shite like performing artists royalties, heaters and lamps for smokers, cleaning bills when someone makes a mess of your place.

Making money in pubs just wouldn't be a lot of fun these days.

[Lecale2]

It's dead. In 5 years the Irish public house won't exist.