A friend and I were contemplating the adult beverage industry. It seems that most bars, pubs, watering holes, cocktail lounges and taverns charge about $3 a pint for a brew. The same brew can be got at the store for about half the price, if not less.
Truly, we thought, the great bar owner would think to undercut the competition: Charge $2.00 for a brew, and make up the difference in volume. Once word spread of the establishment, many, many people would come to save a few bucks on beer.
Why doesn’t this happen?
There are a number of factors.
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There’s a limit on the service volume that a bar can provide. On a busy Friday night, they can’t possibly sell more beer than they’re already selling, even if they were giving it away for free. So there’s no incentive to lower prices, and a great incentive to raise prices.
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Obviously people will pay $3.00 a pop for the experience of having a beer in a bar. In Manhattan, it’s $5.00 - $7.00 and people are still happy to do it. Bars aren’t just places to buy alcohol. Even (especially) in a shitty economy, the market bears it. So why change it?
So you think the rent is free and the people who work there also work for free and the government does not collect taxes and. . . what world do you live in? Because I want to live there too.
It does happen, on occasion… there’s a watering hole in DC called “The Common Share” that sells any and all pints for $2 (although I think their Guinness pints now sell for $3). The place is packed every weekend. Of course, they don’t spend a whole lot on decor or various other amenities (though they do keep the toilets clean as best they can).
At the university I went to, there was a bar on campus run by the graduate students. It was in their charter that they weren’t allowed to clear any profit after expenses, so the price of beer fluctuated accordingly. Usually it was around 40 cents for 12 oz. This was three years ago.
Occasionally, at the end of the month they would realize they had too much in the coffers and beer would be free. Or they might even put out a bowl of nickels and you would get a beer and take a nickel.
My point is, if you want cheap beer (or cheap food or cheap anything), find a university, then go where the kids go.
Quite right, but I have known certain bars to implement competitive prices on ‘slow’ nights, like, Wednesdays. One local pub sells all draught beers for 1.00 on Thursdays from 8PM to close. Another place I know of in PA has "Kidney Buster Night" on Wednesdays. Starting at 6PM, draught bbers are only .50, but you have to sit at the bar. The price continues until someone has to get up from the bar to relieve themselves:) I thought this was a hoot, as well as a great marketing gimmick.
Where I live now, the frozen state of Minnesota, bar owners must purchase their alcoholic beverages from licensed distributors, and cannot buy from liquor stores, Sam’s clubs, or any other place you and I can shop at. This allows the state, city, county etc. to collect a higher tax rate on beverage served in bars and restaurants. For example, when the Xcel Energy center was built in St. Paul, a chunk of its funding came from a citywide increase in liquor tax paid by bars and restaurants. This explains some of the extra cost, cut other states, Wisconsin for one, allow bar owners to get their anywhere. This explains some of the rather large liquor stores in Wisconsin. But they still gouge for beer, because they can.
was that bar valhalla at rice by anychance chriszarate?
The riff-raff are kept out with higher prices too.
The owners may be reaching out to a certain clientel and don`t want the bother of the younger more aggressive crowds.
We used to have bars around the Milwaukee area that would actually have nickel tap beer nights. You would buy a plastic mug when you walked in the door (say cover charge) for 3-5 dollars and then you could keep refilling it for a nickel. These places dont last too long because the crowds would always get out of control and the surrounding residents would pettition to get the place shut down. Im sure they still made money on shots and rail drinks, and probably on the beer too. But the scene was just too much.
I realise this is an extreme example. Somewhere in the middle is where the bar owners want to be.
<beerconomics>I think the majority of the posters have it right. Bars want to strike a balance between making a profit and keeping their establishments popular. Being one of the staples of the industry, setting the price of beer can go a long way towards doing just that. Of course, there are a myriad of factors which determine how much thge clientele are willing to pay to pony up for a pint, including atmosphere, music, location…the list goes on. In general an upscale bar wants to charge more for beer, to maintain the quality of its customer base, after all, a ritzy bar in Manhattan doesn’t want biker types taking root and turning their place into a dump. (no offense to biker types in here). All in all, I’d say a fairly large volume could be written on the subject.</beerconomics>
The price of a pint of beer in your favorite establishment is determined by supply and demand.
I echo what BrianNStPaul said about bars having to pay a lot more for thier alcohol than retail distributors do. Basically, like he said, bar owners would be better off buying their stock from liquor stores at the same prices the general public pays. But, this is illegal, and although some bar owners still do it, it is done “under the table”.
PS This practice isn’t allowed in Wisconsin either, its illegal there too.
True, and some bars prefer to keep outsiders out. A very ritzy establishment that serves food (5 star restaurant) may not care if anyone other than the food patrons ever belly up to the bar. Eight dollars for a rail drink. This pretty much assures the owners that only the people willing to fork out for the food are going to be at the bar also. Here, the only demand are the diners.
rail drink?
Rail drinks, well drinks, and call drinks. Drinks mixed with varying qualities of spirit, and stored in different areas of the bar - hence the names. More than that I cannot say, since all my time at the bar has been before it rather than behind it.
I thought the same thing! I spent many fond hours at Valhalla under the stairs of the the Chem Lec building at Rice. Couldn’t beat the price of the beer. Back then (~1990) it was usually Shiner Bock.
good bar, beer cheap. Too old now.
There’s a sleazy club in Baltimore, name of Baja Beach Club, that sells 25 cent bottles from 7pm to 10pm every Friday with a 5 dollar cover charge.
I often puzzled on the economics of this: how could they be making any money for those hours? And after asking a few employees, I found out they weren’t…they were barely breaking even. The reason for the special is: no one starts showing up at the club til 9 or 10 anyway, so by running the special, they’re getting enough people in to at least cover payroll and expenses for those hours.
Well, there’s always the strategy of coming to the bar with a few under the belt already, not that i’ve tried that or anything :cough:
chriszarate had it right.
When I attended The Ohio State University, there was a bar called “Not Al’s Pub”. They didn’t ID and had “quarter Tuesdays” where 1 bucks got you 4 beers.
I’ve also heard of a local bar that would charge a small cover ($5?) to get in and give you a wrist-band. You could drink free until you went to the restroom where they snipped the wrist-band. After that you had to pay.