True cost of a 'free pint' revealed as pubs make record low profits on beer

There's nothing better than a free pint - but wait until you hear how much it would cost the pub pulling it.

While inflation and stagnant wages have left many of us feeling like we've been priced out of going to the pub, new figures have revealed the heartbreaking plight currently faced by Britain's boozers.

Shocking data from the British Beer & Pub Association, by Oxford Economics, found that pubs are making just 12p profit on every pint sold, once tax and other costs have been knocked off. Compare that to 2009, when a pint made a profit of 84p.

With the average pint in the UK costing £5.15 according to the Morning Advertiser, that means, just one free pint would cost a pub 43 pints just to break even. Never mind crying over spilled milk, a spilled pint doesn't bear thinking about.

Why do pubs make such little profit per pint in the UK?

Pubs are dying with current costs (Mike Kemp/In Pictures via Getty Images)

It largely comes down to the fact that the UK has one of the highest alcohol duties in Europe, with pubs also forced to pay 20 percent VAT on top, in line with standard VAT rates.

Meanwhile, in other parts of Europe, hospitality VAT rates are significantly lower, allowing pubs and restaurants to claw back more profit in an already struggling industry.

In Spain, for example, standard VAT is 21 percent, but hospitality VAT is less than half of that at 10 percent. Likewise, in Portugal, standard VAT is 23 percent, but hospitality VAT is just 13 percent.

A reduced hospitality VAT rate is something which Nighttime Economy Advisor Sacha Lord has been calling on the government to introduce for a number of years.

'We are losing a pub every day'

Sacha Lord is calling on the government to reduce hospitality VAT (David M. Benett/Dave Benett/Getty Images for British Pop Archive)

"The biggest thing we can do to help pubs, is to bring in a specific hospitality rate VAT. This happens right the way across Europe, where on average it’s around 8 percent. We’re still at 20 percent," he told LADbible.

"The only advantage of Brexit is we can now set our own VAT rates. If we had VAT at 12.5 percent for say a three year period, it would help the sector recover. My argument is 12.5 percent of something, is better than 20 percent of nothing, which is a closed business."

With pubs up and down the country being forced to close their doors permanently every single day, it's not just landlords and business owners who are being affected by these closures.

"We are losing a pub every day. A pub is more than just a pint, it’s a part of our local community and in a world suffering from a pandemic of chronic loneliness, they are needed now more than ever before," Sacha continued.

"Lose the pub, lose the heart of our villages and towns."