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How to Calculate Wet GP on Beer, Wine and Spirits (UK)

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Wet GP is the same sum as food GP: what a serve sells for, less what the liquid in it cost you, over the ex-VAT selling price. Only two things make drinks different — your till price has 20% VAT inside it, and the cost per serve must be worked back out of a keg, cask or bottle rather than read off an invoice line.

GP % = (ex-VAT selling price − cost per serve) ÷ ex-VAT selling price × 100

ex-VAT price = cost per serve ÷ (1 − target GP), then × 1.2 to get the till price

Take the VAT out before you divide

HMRC's guidance says you must "standard rate all your supplies of drinks containing alcohol, whether you sell them for consumption on or off your premises" (VAT Notice 701/14, section 3.7.1), and even soft drinks that would be zero-rated in a shop are standard-rated once drunk in your building. The standard rate is 20%.

So a pint on the board at £5.40 is not £5.40 of revenue. Ex-VAT it is £5.40 ÷ 1.2 = £4.50, and the £0.90 was never yours.

Divide by the till price and a pint costing £1.73 reads as a 68.0% GP. Divide by the ex-VAT price and it is 61.6%. Same pint, 6.4 points of fiction. Every drinks GP target you have been quoted is a net figure; on gross takings you are measuring a different thing.

Cost per serve: what the container actually yields

An imperial pint is 0.568 261 25 of a litre, or 568.26 ml. That fixes the nominal yields.

Serve sizes are not yours to choose. Under the Weights and Measures (Intoxicating Liquor) Order 1988, draught beer and cider must be sold "only in a quantity of ⅓ pint, ½ pint, ⅔ pint or a multiple of ½ pint" (article 2); gin, rum, vodka and whisky in "25 ml or 35 ml" or a multiple (article 3); and wine by the glass "only in, or in a multiple of, the following quantities, that is to say, 125 ml and 175 ml" (article 5A) — which is what makes the 250 ml glass lawful, being two 125s.

Nominal is not saleable. You will never sell 88 pints off a keg. Line cleaning pulls beer through, the first pint is froth, temperature swings cause fobbing, and a cask has sediment that never reaches a glass.

Do not borrow a wastage percentage. It is a function of your cellar routine, so measure your own:

For cask, average what you actually draw off two or three casks. A cask that goes off is full cost with no revenue against it — that belongs in wet GP, not a mental category called bad luck.

Three worked examples

Every price below is illustrative — use your own invoices and board prices.

A pint of keg lager. Keg at £145 ex-VAT, 84 saleable pints.

On the nominal 88 pints, cost would be £1.65 and GP would read 63.4% — nominal yield flatters you 1.7 points a pint. Backwards, for a 65% target: £1.73 ÷ 0.35 = £4.93 ex-VAT, £5.92 on the board.

A 175 ml glass of wine. Bottle at £7.20 ex-VAT.

Cost it on 750 ÷ 175 = 4.29 glasses and you get £1.68 and a 74.2% GP — two points that only exist if you can sell a quarter of a glass.

A 25 ml gin and tonic. Bottle at £16.80 ex-VAT, 200 ml tonic at £0.42, lemon and ice at £0.06.

Switch to a 35 ml house measure and the spirit costs £16.80 ÷ 20 = £0.84, the serve costs £1.32, and at the same £6.60 the GP falls to 76.0%. One decision, 4.4 points, often made without recosting anything. Longer builds work identically — see costing a cocktail.

Watch the cash, not just the percentage. Half that lager costs £0.86 and sells at £2.90 — £2.42 ex-VAT, a 64.3% GP, 2.6 points better than the pint and £1.22 less in the till. Percentage says whether a line is priced right; cash margin per serve says what the session was worth.

Why wet GP is not food GP, and why you should never blend them

Wet runs ahead of food for a structural reason. A pint absorbs no prep hours. The cost of sales on a glass of wine is the wine; on a plate it is the ingredients, while the butchery, stock and mise sit in the labour line instead. Same 20% VAT on both, very different cost base.

The gap is smaller than the trade assumes. The best UK primary source is the UKHospitality and Christie & Co Benchmarking Report. Its 2018 edition — 2017 results, 40 companies, 3,584 managed outlets — put food gross margin at 64.2% and margins on wet sales "1.7ppts higher than on food sales", so wet was near 66%, not the 75%-plus quoted across a bar. In the 2022 edition, covering 2021, "gross profit margins on food sales surpassed that of wet sales for the first time in the history of the survey", which the report attributes to the temporary VAT reduction then in force. It also tells readers to treat its figures "with extra caution", and both are licensed-sector aggregates — a direction of travel, not a target for your site. For food-side targets, see our UK food cost and GP benchmarks.

A blended food-and-drink GP hides a fire in one of them. Take £6,000 ex-VAT food at 64% and £4,000 ex-VAT wet at 68%: £3,840 + £2,720 = £6,560 on £10,000, a blended 65.6%. Let wet slip to 58% and it makes £2,320, the blend reads 61.6%, and four points looks like ordinary drift. The wet line lost ten. Split the number, or it lies to you politely for months — same logic as the food side with VAT.

Mistakes that make the number lie

Where to start

Cost one line properly before you re-price the list. Put a serve through the free GP calculator — it runs both ways, from a price to a GP or from a target GP back to the board price. For the keg, cask, bottle and measure arithmetic already built — drop in invoice costs, read every line's GP and cash margin side by side — use the drinks margin calculator. Hot drinks work the same way: coffee shop margins.

Then run it again after the next price increase. The only wet GP that matters is the one calculated on what you are paying today.

Related guides

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