This is what the price of your pint pays for when the cost of beer rises
- The average pint has increased in price by 50 pence in a year, according to the latest figures
- Due to price increases, many beer fans are wondering where exactly this money is going
Brits certainly have a penchant for beer, with drinkers across the country making up to 9 billion pints of it every year.
But the rising cost of beer has many wondering what exactly their money is paying for.
The average pint of lager in a pub now costs £4.47, up from 47p or 11.7 per cent in a year, according to figures released this month by the Office for National Statistics. A pint of beer now costs an average of £3.81, an increase of 31 pence or 8.8 per cent.
But the price can also vary depending on the type of establishment where you drink. The British Beer and Pub Association (BBPA) says the average pint costs £4.10 in a ‘wet-led’ pub – one that mainly sells booze, not food.
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These soaring prices are doing the impossible and deterring some beer fans from their favorite drink – or at least from buying it.
Major beer brewer Heineken this month announced a 22 percent profit drop for the first six months of the year – blaming rising beer prices and rising costs for the deficit.
Meanwhile, the rising cost of living has led to an increase in craft breweries going out of business as drinkers drink less. So what is the price of your pint really paying for?
Beer industry insiders say most of the cost of a pint goes towards paying taxes and bills – with little profit for pubs and brewers.
Figures from the BPPA show that over a third (33.4 percent) of the price of a pint is spent on taxes.
Of that £4.10 pint served in a wet pub, VAT is 68p, alcohol duty 46p, business rates 9p and other taxes 14p, such as corporate and employment tax. That’s a total of £1.37 to the taxman.
Wages are the second highest cost item, accounting for 17.8 percent of the price of a pint – or about 73 pence of the typical pint.
Only 7.5 percent of the price of a pint is profit, and that has to be split between the brewer who makes the beer and the pub that sells it.
Pubs and brewers are desperately trying to keep the price of a pint as low as possible, the trade organization added.
BBPA chief executive Emma McClarkin said: “Unfortunately, as inflation slows, businesses and their customers are still feeling a lot of pain.
While the price of other consumer goods has risen on average by 24 percent since 2021, brewers have worked hard to minimize the impact of disrupted supply chains and cost increases for customers, with the average cost of beer rising by less than half. that at 11 percent.
“British pubs and brewers are passionate about serving their communities and they will continue to try to reduce the impact of costs on customers, but we really need the government to step up and take action on inflation and ensure that there will be no further increases in excise duty, so a pint at the location can remain affordable for everyone.’
Alternate figures from the Society of Independent Brewers show that a pint costs an average of £4.50.
In a free pub – one not tied to a brewery – about 75 pence of that is tax and 22 pence is beer tax, so about 22 percent of the total pint price.
The cost of making the beer is about 60 pence. The brewer makes a profit of about 29p a pint, before all expenses, while the pub makes £2.64 with no expenses.
In a tied pub – one that has to buy part of its beer from a certain brewery – the figures are almost the same.
However, in this case the brewer would only earn 1 pence per pint, while the pub would make £2.08 and the company that owns the pub would get 84 pence.
All Siba figures are calculated for a small brewer producing about 250,000 liters of beer per year – or about 440,000 pints.