MA Friday 20 Feb 09

Help needed-Buying out sums

info man

* Thread is open
* Report this Thread

I heard recently a major pubco make the statement that if all their publicans bought out 1 barrel a week it would cost them £7,800,000.00 in lost revenue. I must state that this was not specified if it were weekly, monthly or annually.

I have been doing my sums and have come a little unstuck. Any help would be greatly appreciated as it goes some way to explaining the cost of the beer tie and the allegded benifits to the publican.

If i presume it is monthly then £7,800,000.00 x 12 months =£93,600,000

I then divide by 52 to get the weekly cost at £1,800,000

From this i then divide by the number of pubs (7500) and get a weekly figure of £240 per BB in lost revenue for a brewers barrel.

As this is based on 36 gallons i will divide by 11 to get kegs which is 3.27. I then divide £240 by 3.27 and get £73.33 per keg(based on an 11g keg)

If these figures are correct then across the board every publican who has a deal with this comapny pays £73.33 (or thereabouts) above the wholesale price that the pub co gets for being a middle man.

Further to this is the pubco has taken into account that it would usually give discounts to some of its publicans then the profit of £240 per BB would be even higher. Any help with the numbers would be great as when you se such big figures it is easy to get confused.

Secondly if this was not a monthly figure but annual am i to belive that the wholesale price differences between the brewers and pubco are only £20(240/12) per brewers barrel or around £6 a keg?

Here are some theoretical sums on two pubs. The first doing 300BB per annum and the second doing 200BB per annum with no discount, £150 per BB and £100 per BB.

300

300 x £240=£72,000

300 x £190=£57,000

300 x £140=£42,000

200

200 x £240=£48,000

200 x £190=£38,000

200 x £140=£28,000

This is in theory the wet rent that you pay to the pubco as pure profit. If you add this to your rent do you think that this is either fair or viable as a combined rent when compared to the freetrade?

Very interesting info man. It's particularly interesting that your suns, worked out on extrapolating a throw away statement from a pubco boss (can I hear the indignant tone of Simon Townsend or Ted Tuppen talking to a minister about how hard done by they are ringing in my ears?) figures stack up so close to those others have done on working out the true wholesale prcie of a Brewer's Barrel? It certainly isn't £400 which is what many tied lessees are paying now for standard lager.