Where the money in your glass actually goes, and why the landlord is not the one getting rich
The Arithmetic of a London Pint, Explained by People Who Pull Them
There is a moment, familiar to anyone who drinks in this city, when the card machine is turned toward you and you see the number. You say nothing. The bartender says nothing. You both look at the pint as though it might apologise. Then you tap, carry it to a wobbly table and tell your friends that somebody, somewhere, is making an absolute fortune.
I have spent the past month asking publicans across north London who that somebody is. I sat in back offices in Islington, Kentish Town and Tottenham with people who opened their books to me on the condition that I did not name the pub. The answer, I am sorry to report, is that almost nobody is making a fortune, least of all the person behind the bar.
Start With the Glass
Break a pint into its parts and the beer itself is a smaller share than you would guess. The publican buys the keg from a brewery or, if the pub is tied, from the pub company that owns the building, often at a price above the open market. On top of the liquid sits beer duty, and on top of everything sits VAT, which takes a sixth of what you hand over before anyone in the building has been paid. The rates are public and are set out on GOV.UK for anyone who enjoys being annoyed with precision.
What is left has to cover the things you do not taste. Staff, who must be paid properly and should be. Gas and electricity, which in a building full of fridges, cellar cooling and glass washers is a formidable bill. Rent. Business rates. Insurance. The licence. The sports subscription that costs a pub far more than it costs your living room. Waste collection. The man who comes to clean the lines.
The Building Is the Business
One landlady in Kentish Town put it to me plainly. She does not really sell beer, she said. She rents out warm chairs by the hour and the beer is how she collects. Once you see a pub as a property operation with a bar attached, the pricing makes more sense. A pub near a Tube station in zone two is paying for some of the most expensive floor space in Europe, and it has to earn that back between five o’clock and eleven.
This is also why the same pint costs so much less forty miles up the motorway. The beer is identical. The duty is identical. The building is not. London prices are, to a large degree, London property prices served in a glass.
The Tied House Problem
A large share of British pubs are owned by pub companies and let to tenants who must buy their beer through the landlord. The arrangement can work, since it lowers the cost of getting started. It can also squeeze. Tenants have rights under the statutory Pubs Code, including in some circumstances the option to go free of tie, but several people I spoke to described the process as slow and wearing. A free house keeps more of each pint and carries more of the risk. Neither model is easy money.
Why Food Changed Everything
The pubs that are doing well have nearly all stopped relying on drink. Food brings in people who would not otherwise come, fills the quiet early part of the week and carries a better margin when it is done sensibly. The Sunday roast is now, for many north London pubs, the single most important service of the week. One publican told me his Sunday pays for his Monday, Tuesday and most of his Wednesday.
The others have diversified in ways that would have baffled a landlord thirty years ago. Quiz nights, of course. But also co-working by day, supper clubs, craft markets in the yard, comedy upstairs and a parent-and-baby morning that he described as the loudest shift of the week by some distance.
The Customer Changed Too
Younger Londoners drink less than their parents did, and they are choosier when they do. Every publican I met had expanded the range of low and no-alcohol options, and they all said the margin on those is perfectly respectable. The after-work crowd has also thinned and bunched. Hybrid working has turned Thursday into the new Friday and left Monday and Friday themselves oddly quiet in parts of the city. The broader data on household spending from the Office for National Statistics tells the same story at national scale: people are going out less often and expecting more when they do.
A Word in the Old Tongue
The pub is where London keeps its language as well as its beer. Ask for a pig’s ear in the right boozer and you will get a beer. The rub-a-dub is the pub itself, and a customer who is elephant’s trunk has had enough. The house guide to Cockney rhyming slang has the rest, and it is worth knowing before you misunderstand a perfectly friendly offer.
So Who Is Making the Money
The Treasury does well out of a pint. The property owner does well. The energy supplier does well. The brewer does reasonably. The publican, in most of the books I was shown, makes a modest living in a good year and works a number of hours that would trouble an employment tribunal.
That does not mean every price is justified, and I have paid for pints in this city that were simply a cheek. But the general complaint, that pubs are coining it, does not survive an afternoon with a set of accounts. The more accurate complaint is that we have built a tax and property system in which a pint has to carry an enormous amount of weight, and then we act surprised by the price.
My colleagues at the funny end of this publication have had their fun with the subject, as the London satirical news desk will confirm, and The Daily Mash has been making the same joke about London prices for years with no sign of running out. If you ever cannot tell whether a pub-price headline is real, the UK checklist for telling satire from real news is there to help, though in this case the alarming number is usually the true one. More of my business reporting is on my author page at The London Prat.
SOURCE: https://prat.uk/