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June 13, 2010

Why are bottles sometimes more expensive than drafts at some bars?

the rowan treeHey service industry people, I have a question for you.

Why, at some bars, are drafts cheaper than bottles?

When I was at the Rowan Tree (pictured) last night, I asked the bartender if there were any specials. Little bottles of domestic beers were $1.75, she said, and buckets of little bottles were $6.

Side note: What's the name for these small bottles? I can't think of it. I keep wanting to call them "pony bottles" but I know that's not right.

I asked her how much draft domestics cost. 

"$1.50," she said. Huh? ...

Shouldn't bottles be cheaper than drafts? Why, at so many neighborhood bars (Down the Hatch comes to mind), are bottles more expensive? Is it a question of demand?

I almost failed Economics in college, and I've never trusted mathematics, but I remember something about demand driving up price. Using that logic, I have developed a theory: Bottles are more expensive because more people drink them.

This raises another question: Why would people pay $1.75 for a little bottle of Bud when they could get a draft (served in a mug, no less) for 25 cents cheaper?

I also have a theory for this one: People are dumb.

But that's just a theory.

Oh, and I realize that buying a keg is like buying beer in bulk, whereas with bottles, you're paying for them to be individually packaged. Even so, there are plenty of bars who serve 12-ounce drafts for the same price -- if not more -- than an 12-ounce bottle of Bud.

(Photo by me)

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Posted by Sam Sessa at 10:23 AM | | Comments (27)
        

Comments

Costs more due to packaging. The bottle, the label on the bottle, the cap on the bottle, the six pack holder, the case in which the six packs goes in. Plus, kegs are re-useable

Oh Samster, broseph, my foamy homey, why you gotta do this so early on a Sunday?

This is simple and complicated. The simple part: before you get into demand AND supply influencing price, there is cost. Rational people don't sell below cost (although sometimes they do).

N.B.: I call them pony bottles, or used to, especially Rolling Rock. Maybe that's because of the horse on the label. Maybe not.
http://wiki.answers.com/Q/Does_Miller_beer_still_sell_the_pony_bottle

It costs less to manufacture 12 ounces of beer in a keg than in a bottle:
1) X glass bottles costs breweries more than 1 keg.
2) Keg's are reused, lowering the production cost for brewers
3) Labels, caps, paper six packs, cardbpoard cases, the whole process costs more for bottles.
4) Shipping costs: Bottle weigh more and take up more volume than a keg, so they cost more to ship and warehouse.
5) Bottles take up more space, cost more to refrigerate, and involve more labor (stocking, hauling away trash) for bars.

That's just the cost side, which you have to consider before considering supply and demand forces to determine price. Not to mention tastes and preferences and then the fact that people really don't always act like rational beings.

Cae in point: WTF is with people who claim that draft beer makes them sick because of the carbonation, so they must drink bottles only? What do they think the magic bubbles are in bottled beer? Elf gas? Fairy ether? Do they breathe the same air as me, since it is in the air.

True, higher concentrations of CO2 in the air will make you sick, but wouldn't drinking straight from a bottle give you more CO2 than a nicely poured beer in a glass where much of the carbonation comes out and creates the head?

Okay, thanks for making my brain hurt. Can I just write a poem about beer nuts for Tipsy Tuesday now?

Wouldn't bottles be more expensive by their very nature?

The packaging and shipping involved with all the glass causing all the extra weight in shipping.

Beer in a bottle in more expensive for the convenience of having a small amount of beer without having to get a whole keg. But in a bar, the tap is more economical, I'd speculate.

Some people like the bottle taste better than draft because they're used to it and will pay more for it, even though most of the serious beer tasters think otherwise.

there are only a few places i will order draft beer because i know the taps and lines are cleaned regularly. unfamiliar bar, bottled beer is always safe

Maybe because they regard stocking bottles a nuisance. They take up more space than kegs for an equal number of servings and in the green world of recycling, bottles are a greater problem to dispose of, which is more time, space, and effort than merely returning a keg.

Draft is pretty much always cheaper. At Corridor WIne a 1/2 keg of Bud
is $89. That's 168 12 oz servings. Or ~$0.53 per serving. A case of 24 bottles will run $15, or ~$0.63 per 12 oz. And that's full retail. At the bar level, I bet if you can move full kegs, the price drops rapidly. Probably a lot more than if you move a lot of bottles. However it would take a bar owner/manager to give those numbers.

Shouldn't drafts be less expensive in most cases, unless it's a more expensive beer?

The bar buys a huge quantity of draft beer (in a keg) at a very low price, including very low packaging cost... so dispensing that beer should be cheaper, no?

Shouldn't it be the same idea that makes a can of soda more expensive per oz than a 2 liter of soda?

Maybe people drink bottle because of the "sterile" seeming as opposed to the pint glass that has been washed and used before, who knows. One thing though, lines that aren't cleaned regularly or get enough use will screw the chemistry of the beer resulting in foul taste and god knows what else. The few times i've had off draft beer , the hangover from three is like a hangover from 8 normal drafts.
I call them "pony" bottles as well, it's the term that was used growing up.
Still prefer draft for the sake of cheapness.

RE Draft beer making one sick due to the carbonation. Draft beer propelled by carbonated gas is good, as long as the beer itself is. Fresh and clean that is. A keg should be emptied within several days or it starts to become flat. In the past (hopefully) many bars used air compressors to pump the beer through the kegs. While this could be a good system it usually wasn't. The compressors were most often kept in some dusty basement and drew the air from this area. Not good. Also they usually were not very well maintained and sometimes leaked oil into the equipment. I dont think many places use these things anymore.

I'd be more surprised by bottles being cheaper than comparable tap beer. With a keg, the bar is getting a significant volume discount for the equivalent of 5-6 cases of beer in one reusable container. That $1.50 domestic draft is about 300% profit margin even with all the spillage that goes down the drain. There's an economics reason why college students prefer kegs for parties (other than the opportunity for keg stands).
.

"Keg's"

Maybe the draft beer costs more because Owl Meat has to pay for the extra apostrophes.

Seriously? You have to ask this?

Really??

Depending on the specifics, a keg costs wholesale/bulk about what a couple dozen cases of bottles cost. In most states, the bottles don't come back; in the states where they do, there's cleaning and shipping involved.

I have a better laugh yet. Back when the Pratt Street Ale House was the Wharf Rat, in the 1990s the standard beer special was "3 beers for $3", three different 10-ounce mugs of house-brewed beer. OR you could buy a 12-oz. Bud longneck for $3.75. Untold thousands of clueless baseball fans and convention goers paid off the mortgage on the place buying the latter. A testament to the power of mass marketing.

@Alexander D. Mitchell IV -- Did you read the last paragraph?

Oh, and I realize that buying a keg is like buying beer in bulk, whereas with bottles, you're paying for them to be individually packaged. Even so, there are plenty of bars who serve 12-ounce drafts for the same price -- if not more -- than an 12-ounce bottle of Bud.

If kegs are so much cheaper, how do you explain that? That's half my point.

As a general rule I stand by:
People are dumb!

The kegs are cheaper, but not THAT much cheaper. What the breweries save on bottles, labeling, packaging, shipping, etc. with kegs is eaten into in part by the costs and labor of returning kegs back to individual breweries (imagine returning a keg all the way back to Belgium or Germany, for example), and the occasional stolen kegs (the hefty deposits we see on kegs may or may not cover their actual cost).

There are breweries experimenting with cost containment by using disposable, recyclable "plastic kegs" (basically plastic "party balls" inside a cardboard keg box) for one-way distant shipping of specialty beers, but they're running into some opposition because nobody seems to actually recycle the darned things.

Aside from that, save for a few exotic exceptions like cask-conditioned barleywine, draft beer SHOULD be cheaper than bottles or cans, and as a rule it's better for the planet. And while we're at it, clothing shouldn't be five or ten times more expensive because it has some certain name or logo sewn on it and beer advertising would be about flavor and quality rather than bikini teams, funny-looking dogs, and idiots screaming into phones. But human psychology sure isn't logical, is it?

Bikini teams? Dogs with sunglasses? Man I could go for a Bud right now.

...or a Schmirnoff....ICED!

Sam,
You keep saying there are plenty of bars that sell 12oz. drafts and 12oz. bottles for the same price. Where are you buying 12oz. drafts?? Most modern day bars use 16oz. 'pint' glasses and some unscrupulous places use 14oz. fake pints, but 12oz. drafts are pretty hard to find.

As for pricing, I can give you some wholesale figures: a popular import costs $120 a keg plus $30 deposit. The equivalent amount of bottled beer would run you right around $177. Either way the bar is making money, but the draft is the cash cow.

LGood -- Maybe I meant 14-ounce glasses. I never was good with math. That's why I asked about prices and stuff. But all I got was scorned by people who got mad at me for being stupid. I'm going to sit in the corner with a box of tissues. You'll barely hear me sobbing. Promise.

Most "pint" glasses are indeed just a hair larger than 12 ounces.

YES! VINDICATION!

Wow, I better call my suppliers and tell them that 1 pint actually equals 12 ounces, not 16 and that all of those boxes I get full of glasses that say 16 ounce are actually 12. Trust me Sam, most bars and restaurants use 14-16 ounce pints for beer, 10-12 ounce highballs for mixed, and 6-10 ounce rocks/old fashioned glasses. I would never try to steer you wrong.

Not yet, Sam. The "standard" bar tumbler or "shaker" glass can be found in anything from 12 to 18-ounce configurations, and even a few rare 20-ounce ones. Even the same "size" glass can vary depending on the thickness of the glass and the depth of the bottom. I have even seen one place (now gone, thankfully) that kept two different size glasses--big ones for bottles and 12-ouncers for drafts.

The only way to know for sure is to take along a measuring beaker and pour your "pint" into it after being served. That, or patronize one of the few places that keeps marked British Imperial pint glasses. (And measuring your poured serving may make you really unpopular really fast in many places.)

OMG what a stupid question, I think all the above poster have covered the various answers that should be painfully obvious anyone with 1/2 a brain. Dear Lord...

Never underestimate the public, drunk richard.

In another Baltimore Sun online forum, they are hearing the wrath of people who feel deceived because they apparently thought every thing inside a "Pennsylvania Dutch Market" came directly from an Amish farm and was "home-grown" and organic.

I've had to convince some people that, in spite of the "import" price, the Guinness they were drinking was brewed in North America under contract.

I've had to convince people that beer kegs weren't thrown out by bars when they were empty.

I've had to try (in vain) to convince some people that the B&O Railroad Museum was not owned and operated by the City of Baltimore, and that their employees are not City employees.

Heck, I'll bet Sam has to convince some people that his job is a paying job.......

There should be a new blog!
"Ask an annoying person!"

MrEd

Draft beer doesn't go flat in a few days, as long as it's kept cold in a balanced system.

i.e. dispensed at 38 degrees with the CO2 at around 12-14 psi for most domestic brews.

In fact, draft beer, stored and dispensed under those conditions, will taste brewery-fresh for months..

Ah A.D.M.IV, Sadly as you well know, you can lead a horse to water but you cannot make it think.
You lead a good fight in the trying, though.

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About Erik Maza
Erik Maza is a features reporter at the Baltimore Sun. He writes for several sections of the Sun paper and contributes weekly columns on music and nightlife. He also writes and edits the Midnight Sun blog. He often covers entertainment, business, and the business of entertainment. Occasionally, he writes about Four Loko, The Block, the liquor board, and those who practice "simulated sex with a potted palm tree." Before The Sun, he was a reporter at the Miami New Times. He's also written for Miami magazine, the Orlando Sentinel, the Sarasota Herald Tribune and the Gainesville Sun. Got tips? Gripes? Pitches? He's reachable at erik.maza@baltsun.com. Click here to keep up with the dumb music he's listening to.

Midnight Sun covers Baltimore music, live entertainment, and nightlife news. On the blog, you'll find, among other things, concert announcements, breaking news, bars closings and openings, up-to-date coverage of crime in nightlife, new music, round-the-clock coverage of Virgin Mobile FreeFest, handy guides on bars staying open past 2 a.m. on New Year's Eve and those that carry Natty Boh on draft. Recurring features include seven-day nightlife guides, Concert News, guest reviews of bars and concerts, Wednesday Corkboard, and photo galleries, as well as reader-submitted photos. Thanks for reading.
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