“Why is a pint in a pub so much more than a few cans from the supermarket?”
On the surface, it looks like a fair comparison.
In reality, pubs and supermarkets operate under completely different models.
How supermarkets price alcohol
Supermarkets often sell alcohol as a loss leader. That means pricing it very cheaply to get customers through the door, knowing they’ll make money on the rest of the weekly shop.
In that context, beer isn’t the product — footfall is.
Alcohol is one small part of a much bigger basket.
How pubs work
In a pub, beer is the business.
Every pint sold has to contribute towards:
- staff wages
- rent
- energy
- business rates
- maintenance
- licences, compliance, and insurance
There’s no grocery trolley at the end of the bar to make up the margin elsewhere.
Fixed costs change the equation
Pubs carry a high level of fixed costs — expenses that stay the same whether it’s busy or quiet.
When those costs rise, pubs have limited choices:
- increase prices
- absorb the cost and accept lower margins
- reduce hours or services
- delay investment
None of those options are easy, and none of them are free.
VAT is part of the picture
VAT also works very differently in pubs compared to supermarkets.
In a pub:
- we pay VAT when we buy most of what we sell
- and we charge VAT when we sell to customers
While VAT is ultimately passed on, it affects pricing and cashflow in a way that isn’t obvious from the outside.
Supermarkets, particularly on food, operate under a very different VAT structure. That gives them far more flexibility in how they price alcohol as part of a wider shop.
“But some pubs are holding prices…”
You might see pubs saying they’re keeping prices the same despite rising costs.
That doesn’t mean costs haven’t gone up.
It usually means the pub is absorbing the increase instead of passing it on.
That protects customers in the short term, but it also squeezes margins and limits what a pub can reinvest in staff, upkeep, and improvements.
Holding prices isn’t a sign that nothing has changed — it’s a choice.
Where we sit at the Old Cross
At the Old Cross Tavern, pricing has never been about being the cheapest pint in town. It’s about offering fair value in a proper pub environment — well-kept beer, trained staff, and a place people actually want to spend time in.
That’s a very different offer to picking up a few cans at a checkout and heading home.
The simple version
Supermarkets use alcohol to sell groceries.
Pubs sell alcohol to keep the doors open.
Once you understand that difference, the price gap makes a lot more sense.
According to the British Beer & Pub Association, the pub sector faces significantly higher operating costs than supermarkets, including staffing, property costs, and energy usage.
CAMRA has also repeatedly highlighted the structural tax imbalance between supermarkets and pubs when it comes to alcohol pricing.
About the author
James Ashbourne is the owner of the Old Cross Tavern in Hertford, a CAMRA award-winning real ale pub. With more than 30 years in the licensed trade, James has run several pubs in Hertford town centre, including The Duncombe Arms and a specialist craft beer bar.
During his career he has helped multiple pubs earn a place in the CAMRA Good Beer Guide, reflecting a long-standing focus on well-kept real ale and proper cellar management.
He writes about real ale, pub culture, and the realities of running a modern British pub.
