Generally speaking...

Broton · Post by **Broton** » Tue Mar 10, 2009 10:32 am

Not taking into account brewery variances... but how much does a full keg of beer cost a pub? Versus how much a keg of beer would cost an individual should one purchase one at the beer store? Is it half price?

For instance a keg of 50 would cost 280 bones... how much would a pub pay for the same amount of mass produced brew?

Just curious...

-B

Jon Walker · Post by **Jon Walker** » Tue Mar 10, 2009 10:54 am

Depends on a lot of factors. Big brewery reps often throw in discounts or even free kegs for licensees who agree to have several of their products on tap. Sometimes they'll offer discounts to entice places to switch from another product to theirs. Bigger brewers have a larger profit margin with which to work deals to compliant customers and in most cases those customers will fare better price wise than you ever will as an individual. Smaller batch brewers have way less wiggle room which is why adding accounts is often a challenge unless the bar owner/manager is more interested in quality than in bargain swill.

But the fact you are pricing out kegs of 50 would seem to indicate you're looking for bargain beer rather than quality beer...in which case I'm not sure you are asking the right group. Why exactly are you curious about such a thing?

GregClow · Post by **GregClow** » Tue Mar 10, 2009 10:59 am

Jon Walker wrote:Big brewery reps often throw in discounts or even free kegs for licensees who agree to have several of their products on tap. Sometimes they'll offer discounts to entice places to switch from another product to theirs.

Yeah, except everything you describe is technically illegal.

It's my understanding that if it's being sold above-board, beer costs the same to bars and restaurants as it does to retail consumers. Which is one reason why beer is much more expensive in those places than it is at retail.

Jon Walker · Post by **Jon Walker** » Tue Mar 10, 2009 11:03 am

While I agree on the illegality of offering discounts...I've known enough people on both sides of the business to know that it goes on regardless. Wink, wink, nod, nod.

However I agree that the price SHOULD be the same...though I believe licensees do get a discount when buying bottled product at the LCBO but apparently not at the BS. Am I incorrect on that?

GregClow · Post by **GregClow** » Tue Mar 10, 2009 11:05 am

Jon Walker wrote:While I agree on the illegality of offering discounts...I've known enough people on both sides of the business to know that it goes on regardless. Wink, wink, nod, nod.

Say no more...

Jon Walker wrote:However I agree that the price SHOULD be the same...though I believe licensees do get a discount when buying bottled product at the LCBO but apparently not at the BS. Am I incorrect on that?

Hmmm, not sure. Perhaps a bar owner or brewer can chime in to confirm.

Broton · Post by **Broton** » Tue Mar 10, 2009 11:10 am

Jon Walker wrote: But the fact you are pricing out kegs of 50 would seem to indicate you're looking for bargain beer rather than quality beer...in which case I'm not sure you are asking the right group. Why exactly are you curious about such a thing?

50 was just an off-hand example. I could have said London's Pride, Iron Duke, or a Neustadt product. Either way the question remains the same. I'm just doing a bit of personal research...the question was in the back of my mind. I'm curious if there's a major discount to retailers, or if it's more or less the same...

-B

Jon Walker · Post by **Jon Walker** » Tue Mar 10, 2009 11:25 am

Fair enough. Keg prices are also derived from the cost to make the product. I hazard to guess that making a keg of 50 (when brewing many hectolitres of the stuff daily) is somewhat less than making a keg of Grand River Curmudgeon. On top of those costs obviously there's the brewers profit margin which again I'd suspect is fatter for the bigger brewers than the smaller...so keg prices vary greatly...affected obviously be competition. But as to the retail versus licensee price for a keg of any beer...as Greg pointed out they are supposed to be roughly the same.

I wish Perry was still posting on this board. He could answer this question with real numbers (at least micro brewer numbers).

What obviously varies more extremely is the markup bars and restaurants place on the same kegs of beer. A $5 pint in one place is a $7 sleeve in another. Regardless, the best deal in town remains buying a keg for home/party use or better yet brewing your own.

Broton · Post by **Broton** » Tue Mar 10, 2009 11:38 am

Jon Walker wrote:But as to the retail versus licensee price for a keg of any beer...as Greg pointed out they are supposed to be roughly the same.

Which is the nut of my inquiry. Naturally the price of any product which is of higher quality, and produced in a smaller quantity would, more than likely, cost more. But the Pub v Individual purchases.. was my question. So in theory the price is more or less the same. Is this because of legislation?

And a secondary question. Also generic... how many pints of beer are in a full sized keg? I've always thought it was around 88?

icemachine · Post by **icemachine** » Tue Mar 10, 2009 11:55 am

58.6L keg is 103 Imp. Pints, 124 US Pints

http://www.convert-me.com/en/convert/volume

Torontoblue · Post by **Torontoblue** » Tue Mar 10, 2009 12:34 pm

Jon Walker wrote:However I agree that the price SHOULD be the same...though I believe licensees do get a discount when buying bottled product at the LCBO but apparently not at the BS. Am I incorrect on that?

Licensee's receive a 5% discount for their purchases. Pitiful, isn't it?

$ · Post by $ » Tue Mar 10, 2009 1:22 pm

icemachine wrote:58.6L keg is 103 Imp. Pints, 124 US Pints

http://www.convert-me.com/en/convert/volume

I thought most of our pints were 500ml.

"Since metrication, the "pint of beer" served in Canadian pubs and bars has been considered a colloquial term for "a large glass of beer", rather than a unit of measure, and the size of it is at the discretion of the server. In theory, it should be the 20 ounce (568 mL) imperial pint, but in most cases it is what is loosely termed a "standard" or "18 ounce" pint (500 mL). In other cases, it may be a 16 ounce (473 mL) American pint, or a 12 ounce (375 mL) "bottle pint". It could legally be as small as 8 ounces (250 ml)."

SteveB · Post by **SteveB** » Tue Mar 10, 2009 2:09 pm

Breweries can set different prices for licensees vs. retail but the price has to be set with the LCBO, meaning you can't legally sell a keg to one restaurant for $250 and then charge another $275.

There is also an additional (and hidden) tax charged to retail customers - licensees pay only the GST, but retail customers pay GST + retail sales tax of 12%. Some breweries choose to eat this extra cost to keep the prices the same, others don't, so the only way to know is to actually call up a brewery or the beer store and ask them what the difference in price is from retail to licensee.

Belgian · Post by **Belgian** » Tue Mar 10, 2009 5:33 pm

SteveB wrote:
There is also an additional (and hidden) tax charged to retail customers - licensees pay only the GST, but retail customers pay GST + retail sales tax of 12%.

If the retail price of beer includes already taxes, why are they charging us tax on a tax, plus GST on GST on tax? I think I understand what you're saying, but for the licensee to pay an added GST on tax and THEN a customer pay a GST on the GST on tax, PLUS sales tax on tax -

I wish this province would roll all taxes into all products pre-sale - no special exceptions. There would be less BS-ing and more honest control of final pricing. But if Ontario did this... they then could not sneak in this "compounding tax" (which is the most facile revenue-recovering scheme I can imagine.) Am I being too judgemental?

Ralphus · Post by **Ralphus** » Tue Mar 10, 2009 6:46 pm

Isn't it the transaction that counts as the point of taxation?

iguenard · Post by **iguenard** » Tue Mar 10, 2009 9:34 pm

Kinda OT, kinda, but for those who think 50 is not a quality beer, add it into a blind tasting of any blonde ale and you'd be surprised.

Quite a few Micro product's I'll skip over to buy a pint of 50 on tap.

I think its a case of seeing your uncle in a sleeveless shirt drinking that stuff with a straw that gives it a bad reputation