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Old 12-27-2010, 02:30 PM   #1
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Default Wholesale beer prices

Does anyone know if there is a price difference between the price charged for me to buy a keg of beer and the price a place would charge a bar or restaurant to buy a keg of the same beer?

I was just curious because it seems like a brewery wouldn't make very much at all selling kegs after you take out materials and overhead. I know it used to be that bars were charged more for liquor they would buy for resale... when I worked at a club in Milwaukee the bar would be charged $50 for a bottle of vodka that I could buy for $20 at the liquor store.

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Old 12-27-2010, 08:45 PM   #2
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From what I've seen (and this isn't a statistical universe), bars and restaurants pay 10-20% less than retail if they have much volume.

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Old 12-27-2010, 09:35 PM   #3
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IME, a brewery will charge the distributor a wholesale price, and the distributor charges accounts a retail price. This goes even for the largest volume retail account in Nashville.

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Old 12-27-2010, 09:44 PM   #4
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Quote:
Originally Posted by BrewSpook View Post
Does anyone know if there is a price difference between the price charged for me to buy a keg of beer and the price a place would charge a bar or restaurant to buy a keg of the same beer?

I was just curious because it seems like a brewery wouldn't make very much at all selling kegs after you take out materials and overhead. I know it used to be that bars were charged more for liquor they would buy for resale... when I worked at a club in Milwaukee the bar would be charged $50 for a bottle of vodka that I could buy for $20 at the liquor store.
Pretty sure its like this in SC. I'm not 100% sure, but I think I remember hearing the owner of a local bar that served a ton of craft beer bitching about it. They partner with a beers store to bring new beers into the area. The beer store can get the beer for wholesale prices, but the bar has to buy it for considerably more. Thats why a beer at a restaurant or good beer bar is so expensive per glass, opposed to going out and buying a 6 pack at the store. At least thats my impression.
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Old 12-27-2010, 09:45 PM   #5
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Quote:
it seems like a brewery wouldn't make very much at all selling kegs
They don't and the brewer doesn't

Now you see why this is a hobby?
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Old 12-27-2010, 10:02 PM   #6
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The rules vary by state. It is tightly controlled madness.

The actual material cost of brewing a pint of beer on a large scale is pretty small.
Consider unmalted Barley is less than 10 cents per pound and hops are going to be dirt cheap under contract. We can buy Willamette pellets for under $4 a pound... imagine what the big breweries are paying.

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Old 12-27-2010, 10:12 PM   #7
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Bars have to pay a good amount more than you do for liquor. They have to buy from distributors but can buy a certain very limited amount from the grocery store if necessary. It is cheaper for them to buy from the grocery or liquor store than the distributor.

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Old 12-27-2010, 11:14 PM   #8
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First off, the laws very GREATLY state to state. In Maryland, all wholesale must be sold at the same price to every bar, restaurant, grocery store, all retail outlets. They can have quantity discounts, but again, must be available to all. Any preferential treatment is illegal. Rebates are also illegal.

Second, you are in the Commonwealth of Virginia, aren't all alcohol sales by the state itself? You are literally buying from the state, so who knows what the setup is.

Any bar who pays a higher price wholesale then retail must be not be selling very much of those liquors. I have never heard of a system where the wholesale price is more then the retail price. I guess anything is possible, or some bar owner is straight lying to make it look like his margin is less (very possible, if you ask me)

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Old 12-27-2010, 11:43 PM   #9
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i live in VA. distilled liquor can only be bought at state run ABC stores. the price of a bottle of liquor is the EXACT same price in every store (controlled by computers).

beer and wine you can buy at the gas station, grocery store, etc. i know that in CO any thing over 3.2%ABV must be bought from a liquor store.

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Old 12-28-2010, 09:25 AM   #10
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Yes in VA all hard liquor must be bought through state run ABC stores, which sucks.

The reason I am asking is for a school business plan project I will have to do next semester, in order to get my profit estimates correct. If I can go to my local bottle shop and pick up a keg of Sam Adams Boston Lager for $145.

Going off statistics from the micro matic draft beer profitability site, this would yield ~ 135 16 oz beers with 3/4inch head @ about $1.07 each in cost. Sam Adams goes for around $5.00 a glass here in Richmond. That being said, the establishment would net a profit of $530 off of one keg of sam adams while the brewery itself keeps a small margin of this.

Now if the restaurant was charged say $300 for the same keg, at wholesale intended for resale, the brewery would make more of a profit as they know what the bar will end up selling it for, distributor makes more $, and the bar still rakes in $375 profit. The beer would cst ~ $2.22 per glass.

That was my thought behind posting this and I was hoping someone can confirm since I know that is how liquor is done in some places. The price has to be less for direct consumers (people who buy kegs for themselves/parties) or producers would have to jack up their prices.

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