Bar owners rebuff beer price claims

Two prominent New Plymouth bars owners have hit back at claims the price of beer in licensed premises is over the top and should be reduced.

The claims have been posted on-line at the Taranaki Daily News following an article in which bar owners and liquor licensing inspectors called for the price gap between on- and off-licensed premises to be reduced.

Feedback included comments from Jarren Burns who said bars should drop prices so they were closer to what off-licences charge.

"As a classic Kiwi, I try to engage in two to three heavy sessions of diesel dunking per week. I reckon I heard that it's science that drinking is good for your heart and have therefore started getting heavily involved."

Another reader, "CP", believed bars failed because they didn't sell enough food and drink.

"They don't sell enough because they price themselves out of the market and/or don't have a point of difference which attracts customers."

Bertie Burleigh, owner of Peggy Gordon's, and Crowded House group owner Doc van Praagh said the comments showed a lack of insight.

They were invited to provide a breakdown of the expenses bars associated with every $100 taken over the bar but declined.

Mr Burleigh said profit margins were not as large as the public believed.

"Most bars, for every $100 invested we would be lucky to get $10 back," Mr Burleigh said.

"A bar is a business and it has to make a profit."

Mr Burleigh pointed out the large number of bars that have shut in the city including The Mill, Grumpy Mole, Powderoom, Mad Toms, Crown and Rose, Scruples, Maloney's, Bull and Bush and Breakers.

"If it is so profitable how come they all closed? Bars have to be based on sound financial footing. People have no idea what you've got to factor in."

Wages, insurance, rent, rates, taxes, repairs and maintenance, cleaners, fixtures and fittings, heat, light and power, telephone, entertainment and security costs all need to be taken into account.

"It's not a garage selling twist tops, we sell quality products. You have got to provide a convivial atmosphere and inviting environment. You have got to make it a place where people want to come," Mr Burleigh said.

"Drinking at Peggy Gordon's is totally different to drinking in the garage at your home."

Mr van Praagh said the hospitality industry was not a cash cow.

"At the end of the day we are here to make a living but as you can see from the number of bars that shut down in town, it is not that easy," Mr van Praagh said.

"After your costs and your overheads most bars are lucky to be making 10 to 15 per cent. There is not much left in the pot and if you don't keep a tight rein on things you will soon be shutting the doors."

He said bars could not purchase beer from the breweries any cheaper than what supermarkets were selling it for.

"The beer in supermarkets is discounted to get people in to shop."

Mr Burleigh challenged those people who believed bars were a bunch of rip-offs who were over- charging to put their money where their mouth is and get into the industry.

"If they think that they can do it cheaper then bring it on and put your house and chattels up for security," he said.

- © Fairfax NZ News