Why is alcohol so expensive?

I’m really curious about why alcohol costs so much in Australia. It feels like prices skyrocket when you go out to a pub. For example, I can buy a 24-pack of Little Creatures Pale Ale at the liquor store for around $50, which breaks down to about $2-3 per 330ml bottle. Yet, if I order a pint at a pub, I’m looking at around $15. That’s just ridiculous! I’d still think $7-9 is reasonable, but $15? That’s outrageous.

Edit: Many commenters mentioned taxes, but doesn’t that also apply to the alcohol at liquor stores and beer distributors?

One thought on “Why alcohol so expensive”

  1. Alcohol prices in Australia can indeed be quite high, and there are several factors contributing to this, especially when it comes to purchasing drinks at pubs:

    1. Taxes and Regulations: You’re correct that taxes play a significant role in the price of alcohol. Australia has a taxation system that includes excise taxes on alcohol, which can make it more expensive than in other countries. These taxes apply to packaged goods (like what you buy in bottles or cans) but can be different in the way they’re applied to on-premise consumption (like at a pub).

    2. Operating Costs: Pubs and bars have higher operating costs compared to retail outlets. They have expenses like rent, wages for staff, utilities, and other overheads that can contribute to higher drink prices. The atmosphere, service, and social experience in a pub also factor into the cost.

    3. Bulk Buying vs. On-Premise Pricing: When you buy in bulk from a liquor store, you often benefit from lower prices due to economies of scale. Pubs typically don’t purchase alcohol in the same bulk quantities, so they have to charge more to cover their costs.

    4. Markups: Bars and restaurants may mark up the prices significantly to ensure profitability. It’s not unusual to see a mark-up of 200-300%, which can be shocking when you’re used to retail prices.

    While the price hike at pubs can feel outrageous, it’s a combination of taxes, operational costs, and business models that lead to those high prices. It’s always worth exploring happy hour specials or promotions that might reduce the cost a bit!

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