GP on drinks: UK pub pricing guide 2026

Last updated: 11 April 2026

Most UK pub landlords have no idea what their actual GP (gross profit) on drinks is — they just know what they’re charging and hope it’s enough to cover overheads. That’s a problem, because without knowing your GP on each drink, you’re pricing blind. You might think a pint of lager at £4.50 is profitable when actually your margin is being squeezed by rising keg costs, or you might be leaving money on the table by under-pricing your premium spirits. Understanding GP on drinks means knowing exactly how much profit you make per unit sold, before you cover staff wages, rent, utilities, or anything else. This isn’t accounting theory — it’s the difference between a pub that survives and one that thrives. In this guide, I’ll walk you through how to calculate GP on drinks, why it matters more than you think, and how to use it to make better pricing decisions in 2026.

What is GP on drinks?

GP stands for gross profit, and on drinks it means the money left over after you’ve paid for the drink itself. It’s calculated as: Selling Price minus Cost of Goods (the price you paid for that drink). If you buy a pint of Guinness for £1.20 and sell it for £4.80, your GP is £3.60. That £3.60 is what you have to cover your staff wages, your rent, your electricity, your licensing fees, and yes, your actual profit at the end.

GP is expressed as either an amount (£3.60 per pint) or a percentage (75% in this example). Most pubs work in percentage terms because it makes comparing across different products easier. A pint of lager at 70% GP is instantly comparable to a glass of wine at 72% GP, even though the selling prices are different.

Here’s the critical distinction: GP is not your net profit. You cannot spend your entire GP as profit. GP is a halfway measure — it shows you what’s available to pay operating costs. A pub running 70% GP on drinks sounds healthy, but if your labour costs are 35% of turnover and your rent is 20%, you’re only left with 15% to cover utilities, stock losses, repairs, and actual profit. That’s why understanding GP is just the starting point.

The reason GP matters in 2026 is that cost volatility is real. A keg of Carlsberg cost one thing in January, something different in March, and might shift again by September because of commodity prices, shipping costs, and supplier negotiations. If you’re not tracking GP, you won’t notice when a cost increase shrinks your margin on a bestselling line — you’ll only notice when the pub’s bank account looks thinner at month-end.

How to calculate GP on your drinks

The formula is simple: (Selling Price – Cost of Goods) ÷ Selling Price × 100 = GP%.

Let me walk through real examples:

• Draught pint of Carlsberg: You pay £1.15 per pint. You sell it for £4.50. GP = (£4.50 – £1.15) ÷ £4.50 × 100 = 74.4%
• 25ml measure of Johnnie Walker Red: You pay £0.38. You sell it for £2.80. GP = (£2.80 – £0.38) ÷ £2.80 × 100 = 86.4%
• Glass of house white wine (175ml): You pay £2.10 (from a box). You sell it for £6.50. GP = (£6.50 – £2.10) ÷ £6.50 × 100 = 67.7%

The “cost of goods” number is what trips up a lot of pub operators. It’s not the list price from your supplier — it’s what you actually paid after discounts, volume rebates, and delivery. If you bought Peroni at a promotional price of £18 per case of 24 instead of the usual £20, your COGS per bottle drops. If you negotiated a 2% discount for paying on time, factor that in. Use your actual invoices, not your catalogue prices.

For draught beer, cost per pint needs to account for wastage. If a keg yields 96 pints but you lose 3 pints to spillage, line cleaning, and flat stock, you’re really getting 93 sellable pints. So a £95 keg that yields 93 good pints costs you £1.02 per pint, not £0.99. Most pubs ignore draught wastage, which means their GP calculations are wildly optimistic. The Teal Farm Pub, which serves Washington, Tyne & Wear, tracks this religiously during Friday stock counts because the difference between 5% and 8% wastage directly affects whether a premium cask ale is worth stocking.

Once you have accurate COGS, enter your drinks into your EPOS system with their cost price. Every time a drink is sold, the system calculates the GP. Over a week, you’ll see which drinks are performing at target GP and which aren’t. Without this data in your till system, you’re making pricing decisions based on instinct.

Why GP matters more than selling price

A lot of pub landlords think: “I sell a pint for £4.50, that’s good, that’s my target price.” But that tells you almost nothing. A pint at £4.50 with a 60% GP is very different from a pint at £4.50 with a 75% GP. The second one gives you £1.50 more per drink to cover costs.

The trap is comparing yourself to the pub across the road. They might be selling pints for £4.20, which looks cheaper. But if their cost of goods is lower (because they’ve negotiated harder with their distributor, or they’re in a free-of-tie location and can buy direct), their GP might actually be higher. Price alone is meaningless without context.

GP is where volume and margin intersect. A wet-led pub might deliberately run 62% GP on draught lager to drive volume and keep the taps moving. A food-led gastro might run 68% because their food margins are higher and they’re less volume-dependent on drink. A premium craft beer bar might run 80% GP on their flagship cask ale because they have a loyal customer base willing to pay. There’s no single “right” GP — it depends on your strategy.

Using a pub drink pricing calculator forces you to think in terms of GP rather than just price. If you input your cost and your target GP, the tool tells you exactly what price you need to charge. It removes the guesswork. You can then test that price in the market — if it’s too high, customers will tell you. If it’s too low, your bank account will tell you.

The real power of understanding GP is spotting when costs change. In early 2026, energy costs for CO2 and refrigeration spiked across the UK. Pubs that weren’t tracking GP per drink suddenly found their profits compressed but had no clear data on why. Pubs tracking GP immediately saw which drinks had their margins hit hardest, and adjusted pricing or substitutions accordingly. That’s reactive management versus understanding your numbers.

Using GP to build a pricing strategy

A sensible GP strategy has three layers: your baseline target, your volume drivers, and your premium lines.

Baseline target: Most UK wet-led pubs should target 65–72% GP on draught beer. This is your bread and butter — the pints that move fast and keep the bar busy. Food-led pubs can push higher (70–75%) because they’re not as volume-dependent. Tied pubs (managed by a pubco or brewery) sometimes have GP targets dictated by their pubco, so check that before setting your own pricing.

Volume drivers: These are your loss leaders. You might run a Tuesday night quiz and price pints at 60% GP to fill the bar. You’re trading margin for volume, which makes sense if it brings in a crowd that also buys spirits, wine, and food. The key is knowing this is a deliberate choice, not an accident.

Premium lines: Your craft spirits, premium wines, craft cask ales — these should run 75–85% GP because they attract different customers and have lower volume expectations. A bottle of Monkey Shoulder at 80% GP might shift 8 bottles a week. A bottle of well vodka at 70% GP might shift 25 bottles a week. Both contribute meaningfully to profit because one more bottle of Monkey Shoulder pays the same as two bottles of well vodka.

The risk is inconsistency. If your pint of lager is 70% GP but your pint of cider is 62% GP, and cider is increasingly popular, your overall drink GP drifts down without you noticing. This is where a simple stock spreadsheet or your EPOS system’s reporting becomes essential. You need to see weighted average GP — what percentage profit are you actually making across all drinks sold, not just on individual items.

To calculate weighted average GP: multiply each drink’s GP% by the number sold, add them all up, divide by total drinks sold. If you sold 200 pints of lager at 70% GP, 80 pints of cider at 62% GP, and 40 glasses of wine at 70% GP, your weighted average is: (200×70 + 80×62 + 40×70) ÷ 320 = 67.9%. That tells you your real drink profitability. If it’s dropping month-on-month, you know the mix is shifting or prices are eroding.

Common GP mistakes UK pubs make

Mistake 1: Forgetting about cost increases

You set a price in January and never change it. In March, your distributor tells you kegs are going up 3%. You nod and think “I’ll absorb it” or “I’ll raise prices next month.” Then you forget. By June, your 70% GP has become 67% because costs have crept up and prices haven’t. This happens in nearly every pub. The fix: revisit pricing quarterly and update COGS in your till system when invoice prices change. If you’re using pub management software with live cost tracking, this is automated.

Mistake 2: Mixing up margin and markup

A 50% markup is not the same as 50% margin. If a drink costs £1 and you mark it up 50%, you sell it for £1.50. But your margin is only 33% (£0.50 ÷ £1.50). This confusion leads pubs to under-price. They think “I’ll mark everything up 100%,” which gives them roughly 50% GP — way too low for drinks. Always work in margins (GP%), not markups.

Mistake 3: Not accounting for wastage

Draught beer wastage is real and ranges from 4–8% depending on how well your lines are maintained and how efficiently staff pour. Some pubs measure it, most don’t. If you’re not measuring it, you’re assuming perfect efficiency and your COGS is too low. Your calculated GP looks better on paper than it actually is in the till. Every Friday, measure how many pints you poured versus how many you should have got from your kegs. The difference is your wastage cost.

Mistake 4: Pricing based on “what the pub down the road charges”

Your competitor might have lower COGS because they’re free of tie and can buy direct. Or they might have higher volume which justifies lower margin. You have no idea. Price based on your costs and your strategy, not theirs. Use market research to understand what customers in your area will pay, but set your price based on your GP target.

Mistake 5: Ignoring low-GP drinks that shift volume

You notice that bottled ale at 58% GP is your third-best seller. You think “it’s dragging my average down, I should delete it.” But you might be wrong. That bottled ale brings customers in during slow periods. If removing it means fewer bodies in the bar, you lose the spinoff sales (spirits, food, next week’s visit). Sometimes a low-GP high-volume line is strategically worth keeping. The point is to make that call consciously, with data, not by accident.

Benchmarking your GP against industry standards

What’s a good GP? Industry benchmarks for UK wet-led pubs typically sit at 65–70% across all drinks combined. Food-led venues often run 70–75%. Premium bars can reach 75–80%. But these are averages — your venue might legitimately sit outside this range.

A tied pub in a busy city center might run 68% GP and be the envy of their pubco. A free-of-tie village local might run 72% GP and still struggle to cover overheads because the wet revenue is lower volume. GP as a percentage only tells half the story; you also need absolute profit per drink and total weekly drink revenue.

The real benchmark is your own trend. If your weighted average GP has dropped from 69% to 66% in three months, that’s a concern worth investigating. Is cost creeping up? Is the mix shifting to lower-margin drinks? Are staff giving free pours? Once you know the cause, you can fix it.

For tied pubs, check your pubco contract — many specify a minimum GP or include pricing guidelines. A free-of-tie location like those served by SmartPubTools’ network of 847 active users has complete freedom to set GP based on market conditions and personal strategy. That freedom is valuable but means you’re responsible for getting the numbers right.

When reviewing GP, also consider pub profit margin calculator tools that factor in not just drinks GP but total profit after overheads. A 68% drinks GP sounds good until you realise your total pub profit margin (after wages, rent, utilities, stock loss) is only 8%. That tells you your overhead structure is too high or your volume too low. GP is just the starting point for understanding profitability.

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