Why Does a Pint Cost So Much? The Reality of Pricing in Hospitality
Have you ever walked into a bar, looked at the menu, and thought, How can they justify charging £6 for a pint? If so, you’re not alone. Many people believe they know the “true cost” of a beer or a meal. But the reality is far more complex.
Behind every plate of food or bottle of beer in a restaurant or bar, there’s a network of rising costs, tight margins, and industry-wide challenges that most customers never see. To understand why hospitality pricing is the way it is, let’s first step into a completely different industry for comparison.
A Tale of Two Industries: Carpentry vs. Hospitality
Imagine you’re a carpenter. Last year, you quoted a customer £3,000 to build a summer house. A year later, material costs have jumped by 50%, so you now quote the next customer £4,500. They might be surprised by the increase, but they don’t question it. They trust that wood is more expensive, and they accept the new price.
Now, let’s shift back to hospitality.
Ten years ago, a pint of beer might have cost around £4. Fast forward to today—rents have increased, energy prices have soared, staff wages are higher, ingredient costs have risen, and VAT remains a major financial burden. Logically, beer prices should rise just like the carpenter’s quote, right?
But here’s the problem: in hospitality, public perception doesn’t work the same way.
The Myth of the “Right Price”
People feel they know what a pint should cost. When prices go up—even out of necessity—many customers resist. Some complain, some accuse businesses of overcharging, and some even boycott venues that they feel are “too expensive.” But what they rarely see is the financial reality of running a bar or restaurant.
Let’s break it down.
The Hospitality Business Model: Where the Money Really Goes
Most hospitality businesses operate under a general financial rule of thumb known as the 30/30/30/10 model:
30% of revenue covers operating costs (rent, energy, maintenance, licenses, etc.).
30% goes to the cost of goods (beer, food, spirits, ingredients).
30% pays for labor costs (staff wages, employer contributions, benefits).
10% is left—but this is before taxes and unexpected costs.
But here’s something most people don’t realize: before any of these costs are even factored in, 20% of all revenue is immediately taken by VAT.
For example, if a venue takes in £120,000 in sales, they don’t actually have £120,000 to spend. The first £20,000 goes straight to the government, leaving them with £100,000 before any of the costs above even begin.
So when we talk about that 30/30/30/10 split, we’re only working with what’s left after VAT.
And here’s the hard truth: in reality, margins are even tighter. Many restaurants and bars find that labor costs alone push beyond 35%, leaving actual profit at around 3%—or even less.
That means a venue making £100,000 in net revenue may only walk away with £3,000 in profit—if they’re lucky.
Now, let’s apply that to the price of a pint:
If a bar follows this model, for every £5 pint sold, the venue takes home about 15p in actual profit.
That’s it.
Why Supporting Independent Venues Matters
It’s easy to assume a bar is making huge profits when prices rise. But in reality, many are struggling just to keep the lights on. Rising energy bills, increased minimum wages, and supply chain costs are putting enormous pressure on independent venues.
When you support local bars and restaurants, you’re not just paying for a drink—you’re helping sustain an industry that thrives on bringing people together.
So next time you order a pint, think about the carpenter. You wouldn’t argue over the cost of their materials—you trust that prices have changed. The same should apply to hospitality. Trust the costs, support your local venues, and enjoy the experience.
Because at the end of the day, bars and restaurants love hosting you just as much as you love going out. Let’s keep that relationship alive.
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