# what would a pub pay for 50ltr keg of "craft beer"



## droid (29/1/15)

hi all, just wondering what sort of coin a brewer could expect to get paid for a 50 ltr keg of say 5% beer?

Cheers


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## DU99 (29/1/15)

should give you a idea of price

http://www.kegsonlegs.com.au/craftbeerkegs?pagenumber=2
http://kegsdelivered.com.au/keg-hire/?sort=bestselling


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## droid (29/1/15)

thanks for that, what do you think such a company would buy the beer for? $200?


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## mikk (29/1/15)

$290-$350 + GST is about normal, I believe, for 'craft' beer. Less for swill, with bonuses as well- ie, buy 8 get 2 free etc


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## zooesk (29/1/15)

I just had this convo with my boss ( publican ) $284 with a bit of change. He charges $5 a schooner which is just over %100 mark up but that mega swill craft beer would cost a bit more


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## verysupple (29/1/15)

zooesk said:


> I just had this convo with my boss ( publican ) $284 with a bit of change. He charges $5 a schooner which is just over %50 mark up but that mega swill craft beer would cost a bit more


Ahh, closer to 100 % mark up.

$284 per 50 L -> = $5.68 per L
Schooner = 425 mL -> $2.41 per schooner
(5 - 2.41) / 2.41 = 1.07 or 107 % increase

I hope you're not employed as the accountant.


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## Cortez The Killer (29/1/15)

Found this 2012 article on point from a NZ perspective 

Interesting read - it compares NZ US and AU

http://theliquorladder.blogspot.com.au/2012/11/the-price-of-beer.html

Cheers


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## zooesk (29/1/15)

Sorry your right my bad but that even more to pay for craft at the tap
Edited last post


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## zooesk (29/1/15)

Do you guys think or is there a craft brewer that supplies to a pub, sell them a keg for that price ( $290)


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## droid (29/1/15)

Cortez The Killer said:


> Found this 2012 article on point from a NZ perspective
> 
> Interesting read - it compares NZ US and AU
> 
> ...


Thanks for the link, interesting stuff and there was a post towards the end of last year on ahb about some aussie micro-breweries trying to fight excise in some form

@zooesk - you'd be excused for thinking that was the low end a brewer might get if you were up at the bar sipping on a $12 pint of beer!


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## Feldon (29/1/15)

droid said:


> @zooesk - you'd be excused for thinking that was the low end a brewer might get if you were up at the bar sipping on a $12 pint of beer!


On a rare foray into the Melb CBD earlier this week that's exactly what they charged - $12 for a pint of Stone & Wood's Pacific Ale (at the Transport Bar at Fed Square - roaring trade too, what with the Aust. Open tennis on nearby).


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## Kingbrownbrewing (29/1/15)

Contrary to popular belief and to most of the incorrect information on this thread, most decent craft beers are cheaper than the megaswill, but dont have rebates or tap agreements.

A good 4.5-5 percent local craft beer SHOULD cost no more than $250ex.

As the percentage goes up so does excise and thus, so does the price. A good local IPA for instance at 6 percents should cost around $290-300 ex.

Beers from interstate, chuck at least another 20-25 bucks on for freight and warehousing.

Of course there are breweries out there that charge far more than that, but as can be expected they arent as widelly purchased.

Little creatures pale, for instance, has gone up to around $280ex last I heard (which was a while) and squires are about $270ex.

A keg of VB will sell around $250 as well!!! (Can you believe that someone could get craft for the same price?)

Now the question is "Why is a schooner of craft beer that is the same price 2 bucks dearer than a schooner of VB?" I dont have an answer for that one, except for greedy venues thinking they can cash in on craft beer.

Hope this helps mate.


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## Mardoo (29/1/15)

Whatever you're working on, don't forget to factor in the replacement cost of kegs, across a year of sales. It's up to you to retrieve them and most publicans won't pay a deposit. Secure storage of empty kegs is rare.


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## indica86 (29/1/15)

Crazy that beer excise increases with alcohol content, but wine and cider it does not.


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## droid (29/1/15)

bloody 'el this is an eye opener


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## buckerooni (29/1/15)

Although I don't have exact examples, beer has always seemed a wee cheaper in NSW compared to VIC. For instance, I don't know where I could get a $5 schooner of VB let alone something decent.

Unsure if it's an economic (beer is cheaper from NSW breweries) or market thing (VIC consumers will pay more). Either way, happy to pay the premium to maintain a healthy distance from those north of the border heathens :lol:


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## zooesk (29/1/15)

Just found out little creatures bright ale is $306 a keg and little creatures IPA is $346 a keg
+ fraught
I can't spell


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## waggastew (29/1/15)

If anyones serious PM balconybrewer. He has had someone BUL and supply to a local pub he has worked at.

Economics were marginal from memory for both him and the pub, more of a cool thing to do. If you managed to sort a licence to brew then things got a bit better but don't give up your day job etc.


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## Blind Dog (29/1/15)

indica86 said:


> Crazy that beer excise increases with alcohol content, but wine and cider it does not.


There isn't usually any excise on wine or cider, they're subject to the Wine Equalisation Tax.


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## mckenry (29/1/15)

i have a publican mate who sells me a keg of JS 'craft' beer for $280. Not sure if he makes anything on that, but certainly wouldn't lose money.


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## Killer Brew (29/1/15)

King Brown Brewing said:


> A keg of VB will sell around $250 as well!!! (Can you believe that someone could get craft for the same price?)
> 
> Now the question is "Why is a schooner of craft beer that is the same price 2 bucks dearer than a schooner of VB?" I dont have an answer for that one, except for greedy venues thinking they can cash in on craft beer.
> 
> Hope this helps mate.


That would be the list or invoice price for VB. Likely that tiered deals, bonus stock and rebates would bring that down especially if it is negotiated as the house preferred pour. Common practice to keep terms away from invoices to make it harder for customers to compare pricing and competitors to match.


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## labels (29/1/15)

Blind Dog said:


> There isn't usually any excise on wine or cider, they're subject to the Wine Equalisation Tax.


There IS excise on cider as it is classified the same as beer even though technically it is a wine. Wine is the only alcoholic beverage not excised and in South Australia the only alcoholic beverage not subject to beverage container deposit (currently 10c per container). Wineries get away with it rather well compared to breweries. WET is considerably less than excise and doesn't have to be paid until the wine is sold.

Breweries have to pay excise as soon as the beer reaches 1.5% alcohol in the fermenter (although I do believe there is some sort of relief for small breweries). The first 1.5% of beer is not excised. Excise changes on the container size. Containers of 48.5L or bigger have a much lower excise than those under. There are three different excise rates for alcoholic content, low alcohol, mid strength and normal strength. So, six different excise levels for beer, don't you just love bureaucracy.

Edit: Cider has the same excise rating as beer, good proof reading NOT.


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## VP Brewing (29/1/15)

I was speaking to the publican at the Metropolitan Taphouse in Nth Melbourne which normally has 7 or 8 rotating taps of pretty decent craft beer and a tap of Carlton Draught. He told me it costs more for keg of draught than craft and they have to sell it for less.


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## Mardoo (29/1/15)

Killer Brew said:


> That would be the list or invoice price for VB. Likely that tiered deals, bonus stock and rebates would bring that down especially if it is negotiated as the house preferred pour. Common practice to keep terms away from invoices to make it harder for customers to compare pricing and competitors to match.


Lets just say liquor industry invoices never tell the full story. Particularly with the large producers, there are so many kickbacks, ahem, um I mean rebate and reward systems that disappear through all sorts of tax loopholes. It's astounding. These alone heavily weight the major market against small producers.


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## Tahoose (29/1/15)

So just rambling some numbers here but the wine excise thingo is basically 39% of $1,300,000 which works out to $500,000 of tax. These are from memory and are not concrete numbers. 

This is for wholesale revenue. I have heard of exemptions for micro breweries, but I'm not sure what range they are in, something is telling me a round the $30,000 mark bit in comparison this is nothing.


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## Killer Brew (29/1/15)

Mardoo said:


> Lets just say liquor industry invoices never tell the full story. Particularly with the large producers, there are so many kickbacks, ahem, um I mean rebate and reward systems that disappear through all sorts of tax loopholes. It's astounding. These alone heavily weight the major market against small producers.


Correct. Have worked for 20 years now on the supply side of food and liquor. Currently with a major multi national food company and a similar story there but not as extreme as grog.


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## Wrayza (29/1/15)

Not too sure about VB kegs going for $250?

About 5 years ago I had a two tap glycol system at home and ran 50ltr kegs for parties. Obviously before home brewing started. Cheapest I ever got a CUB keg for was $190, other times $200.


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## Blind Dog (29/1/15)

labels said:


> There IS excise on cider as it is classified the same as beer even though technically it is a wine. Wine is the only alcoholic beverage not excised and in South Australia the only alcoholic beverage not subject to beverage container deposit (currently 10c per container). Wineries get away with it rather well compared to breweries. WET is considerably less than excise and doesn't have to be paid until the wine is sold.
> 
> Breweries have to pay excise as soon as the beer reaches 1.5% alcohol in the fermenter (although I do believe there is some sort of relief for small breweries). The first 1.5% of beer is not excised. Excise changes on the container size. Containers of 48.5L or bigger have a much lower excise than those under. There are three different excise rates for alcoholic content, low alcohol, mid strength and normal strength. So, six different excise levels for beer, don't you just love bureaucracy.
> 
> Edit: Cider has the same excise rating as beer, good proof reading NOT.


Cider is covered by WET unless it's got added flavourings. It's classified as a wine in WET legislation and therefore exempt from excise. WET is based on wholesale value and charged at a flat rate of 29%, although generous rebates apply.

Beer is only classified as beer if its above 1.15% ABV, and excise applies per litre of alcohol above 1.15%. It's generally charged as it leaves the brewery because the rate depends on how it's packaged. It's charged at a flat rate of around $47 per litre of alcohol (off the top of my head) if it's in a container that is 48L or less and at varying rates depending on ABV if it's in a container that exceeds 48L, although the highest rate of about $33 (again off the top of my head) kicks in at 3.5% ABV.

Agree it's a beareaucratic mess, but its one of the things that keeps me in work so it's not all bad


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## Ducatiboy stu (30/1/15)

HAHAHAAH....My local sells Arstisan/Vintage/Celbration/Sparkling at $5 Schooner (swinging tap ).....Coopers Pale/Dark at $5...Mild at $4.50......and Light at $4 something....and the beer & lines are very well looked after & cleaned

Other pubs in town, add at least 20c just for Pale...And the local clubs have been bought out by the big 2......as per usual


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## MHB (30/1/15)

One of the big determining factors will be the strength, that is calculated in three steps >3%, 3-3.5% and <3.5% with different rates per litre of alcohol and depending on the container size.
You get to deduct 1.15% from the alcohol content before doing the calculation (but they add GST to the total, so that avoids taxing a tax so to speak)
So if you had a 50L keg of 3% beer you do the calculation on 1.85%, 50*1.85% = 0.92L of alcohol, Look at the rate for 3% beer ($7.73/L) Excise comes to $7.15
If the same keg was full of your finest IIPA at 9%
9%-1.15 = 7.85%, 50L*7.85% = 3.925L of Alcohol at a rate of $31.74 = $124.58, just in tax (well excise there are other taxes)
Here is a link to the ATO Excise rates for beer and how to calculate excise

The rates are much higher for bottled beer
Mark


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