Disclosure: This article is written by Shaun McManus, founder of SmartPubTools and creator of the Restaurant Console. All operational claims reflect genuine experience at Teal Farm Pub, Washington.
What Gross Profit Percentage Should Drinks Achieve in a UK Restaurant?
Key Takeaway: UK restaurant drinks GP% target is 65-75%. A bottle of house wine costing £6 sold at £24 ex-VAT achieves 75% GP%. A pint of lager costing £1.20 sold at £4.50 ex-VAT achieves 73% GP%. Drinks are your highest-margin product — if your wet sales GP% is below 60%, you are pricing drinks incorrectly or taking undeclared stock losses.
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By Shaun McManus | Last Updated: May 2026
Drinks margin is the highest-margin category in most restaurants. Unlike food, drinks require minimal labour to serve, have a long shelf life (especially spirits and wine), and have predictable portion sizes. A restaurant that manages food GP% carefully but ignores drinks margin is leaving significant profit on the table.
UK Restaurant Drinks GP% Benchmarks 2026
| Drinks category | Target GP% | Typical cost% | Notes |
|---|---|---|---|
| House wine (bottle) | 72-78% | 22-28% | Most restaurants underprice house wine |
| Wine by the glass | 70-75% | 25-30% | 175ml glass from £6 bottle at £7 ex-VAT = 71% GP |
| Draught lager/ale | 65-72% | 28-35% | Dispense wastage and line cleaning reduce GP |
| Bottled beer/cider | 60-68% | 32-40% | Lower margin — higher cost per unit |
| Spirits (single measure) | 75-80% | 20-25% | Highest margin category if priced correctly |
| Soft drinks | 70-80% | 20-30% | High margin but often under-sold |
| Cocktails | 70-75% | 25-30% | Labour-intensive but high ticket value |
The Drinks Pricing Formula
Selling price (ex-VAT) = Drink cost ÷ (1 − Target GP%)
Example — house wine at 75% GP target: If a bottle costs £6, selling price ex-VAT = £6 ÷ (1 − 0.75) = £6 ÷ 0.25 = £24. Add 20% VAT = £28.80 menu price.
Example — pint of lager at 70% GP target: If a pint costs £1.20, selling price ex-VAT = £1.20 ÷ 0.30 = £4.00. Add 20% VAT = £4.80 menu price. Note: draught beer is subject to 20% VAT in restaurants (unlike food which may be zero-rated).
This is the same formula used for food pricing — see the restaurant menu pricing calculator guide and the restaurant GP% calculator guide for the complete food and drink pricing framework.
VAT on Drinks — What Restaurant Operators Must Get Right
All alcohol is subject to 20% VAT. Soft drinks served in restaurants are also 20% VAT. Hot drinks (coffee, tea) served in restaurants are 20% VAT. This means all drinks pricing and GP% calculations must use ex-VAT selling prices. If you calculate drinks GP% using the menu price including VAT, you overstate your margin significantly.
A pint at £5.00 menu price is £4.17 ex-VAT. GP% should be calculated on £4.17, not £5.00. This is the same VAT trap that affects food cost% — see the restaurant food cost guide for a full explanation.
Tracking Wet Sales Separately From Food Sales
Most operators track total revenue but not food vs drinks split. Tracking wet sales separately reveals your drinks GP% and wet sales mix — what proportion of total revenue is drinks. For most casual dining restaurants drinks represent 25-40% of revenue. If your drinks % is falling, it is usually a sign of poor upselling, menu visibility, or pricing that has not kept pace with cost increases.
The restaurant daily sales report guide explains how to split food and drink revenue in your daily tracking. The weekly P&L guide covers the combined GP% calculation that blends food and drinks margins.
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Frequently Asked Questions
What is a good drinks GP percentage for a UK restaurant?
UK benchmark 65-75% overall. Spirits 75-80%, wine 70-75%, draught beer 65-72%, bottled beer 60-68%. Below 60% means incorrect pricing or undeclared stock losses.
How do I calculate drinks GP percentage?
GP% = (Selling price ex-VAT − Cost) ÷ Selling price ex-VAT × 100. Always use ex-VAT selling price. Wine at £6 cost, £24 ex-VAT = 75% GP%.
How do I price drinks to hit my GP% target?
Selling price ex-VAT = Cost ÷ (1 − Target GP%). At 70% GP: £1.20 cost ÷ 0.30 = £4.00 ex-VAT. Add 20% VAT = £4.80 menu price.
Is VAT charged on drinks in UK restaurants?
Yes — all drinks in restaurants (alcohol, soft drinks, hot drinks) are standard-rated at 20% VAT. Always calculate GP% on the ex-VAT selling price.
What percentage of restaurant revenue should be drinks?
Typically 25-40% for casual dining, 15-25% for food-led operations. A declining drinks % suggests upselling problems, menu visibility issues, or pricing not keeping pace with cost increases.
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