A restaurant earns its living on food and its margin on drink. Yet the drinks list is the one line in the building nobody ever costs: the chef knows to the cent what a plate costs, and nobody knows what a glass costs.
In a 55-seat brasserie, drinks are roughly a third of turnover and close to half of gross margin. They are also the only line where the product can physically disappear between purchase and sale: a plate that leaves the kitchen reaches the table, but a bottle that is opened does not always come out of it entirely.
On top of that, the three arithmetic mistakes hospitality makes most often all live on this line. Costing against the VAT-inclusive price. Collapsing five different categories into one percentage. And calculating that percentage on what was sold instead of on what was poured.
This guide walks the seven leaks one at a time, with the numbers attached. At the bottom you put your own five lines into the calculator: menu price, purchase cost, servings a week and your loss. You get your pour cost per category against the band it belongs in, your blended beverage cost, and in money per year what you pour but never sell.
Everything is worked out in your own browser: nothing is sent anywhere and nothing is stored. The bands are guide ranges for independently run European venues — your list, your city and your suppliers are the final judge.
Why your pour cost looks better than it is
Menu prices in Europe are VAT-inclusive — that is what the guest pays and what is printed on your list. Your revenue is that amount minus the VAT. Divide your purchase cost by the menu price instead of by revenue and you understate your pour cost by exactly your VAT rate. At 23%, a real 30% pour cost reads as a comfortable 24%. That is not a rounding difference, that is the entire conversation.
The second distortion is the average. Draught beer, wine by the glass, spirits, soft drinks and coffee each have their own band, and those bands sit far apart. One summarised percentage can look perfectly healthy while a single line is bleeding: the volume of the other four hides it.
And then there is the difference only drink has. A portion of food that leaves the kitchen reaches the table. A portion of drink that leaves the bottle does not always. Over-pouring, foam, a bottle that goes down the sink after three days, breakage, a round on the house — that is product you paid for and never sold. It raises your cost without touching your revenue, and it is the only leak your bookkeeping will never show you.
The 7 leaks, and what each one costs you
They are ordered by how easily they close. The first three are one evening of arithmetic. The last four are habits, and those cost a month.
1. You cost against the VAT-inclusive price
A 150 ml glass of house wine is on the list at €6.85. The bottle costs you €8.50 and yields five glasses, so your purchase cost is €1.70 a glass. The sum everybody does: 1.70 divided by 6.85 is 24.8%. Fine, you think, wine is allowed up to a third.
Except €6.85 is not your revenue. At 23% VAT your revenue is €5.57. And 1.70 divided by 5.57 is 30.5% — almost six full points higher. On €150,000 of annual drinks revenue, six points is €9,000. That is not the difference between good and bad; it is the difference between a number that is true and a number that reassures you.
The rule is one sentence long: work out every cost ratio on the price excluding VAT. And watch the rate itself — in most EU countries alcohol served at table falls under a different, higher rate than food. Use the food rate for drink and you make the mistake twice.
2. You look at one average instead of five bands
Drink is not a category, it is five of them, and each belongs in its own band. For draught beer a healthy pour cost sits between 18 and 24% of revenue excluding VAT. Wine by the glass between 25 and 33% — the highest of them all, because an open bottle is on a clock. Spirits between 12 and 18%. Soft drinks and water between 10 and 20%. Coffee and tea between 8 and 18%.
Your blended beverage cost is weighted, not averaged: the sum of all costs divided by the sum of all revenue. A venue that sells mostly beer and a little spirits lands nowhere near the mean of the two percentages, and its target does not sit there either. That target follows from your own revenue mix — a figure copied out of a book belongs to somebody else's list.
Which is exactly why the average is dangerous: it can fall neatly inside the band while one of the five lines sits far above it. So the calculator below always shows the five lines separately, with the blended figure alongside — never instead of them.
3. You measure what you sell, not what you pour
Your till counts servings that were paid for. Your stock counts product that is gone. The difference between them is your loss, and it is the only number on this page you cannot calculate — you have to count it.
The arithmetic behind it is simple but it compounds: if 12% of what you pour is never sold, then the number of servings you actually take out of stock is not your sales, it is your sales divided by 0.88. On 130 glasses of wine sold a week, that is nearly 148 you paid for. Eighteen glasses a week, nine hundred a year.
A loss under 3% is normal and not worth chasing. Between 3 and 8% there is a habit at work. Above 10% there is usually only one cause, and it is almost never theft — it is the next leak.
4. The glass that is fifteen millilitres too full
Pouring a 150 ml glass of wine by eye goes almost always in the guest's favour. Fifteen millilitres too much is one centimetre in the glass: nobody sees it, nobody complains about it, and it is 10% of your portion given away.
It compounds fast, because it happens on every glass of every service. Below is the same glass three times, with what it costs a year at 130 glasses a week.
The answer is not a debate about generosity but a line on the glass or a jigger behind the bar: pour once correctly, set that glass beside the others, and show the team where the line sits. For spirits a measured pourer does the same job for a 40 ml serve.
A 150 ml house wine, 130 glasses a week. The hatched part is what goes above the portion — what you give away without anybody noticing.
Fifteen millilitres is 10% of the portion — you are giving away one glass in ten. At thirty millilitres you pour over two hundred and fifty bottles a year that never reach a bill. A line on the glass or a jigger behind the bar costs nothing once and closes this leak completely.
5. The open bottle nobody finishes
Wine by the glass is the most expensive line on your list, and it is rarely the purchase price that makes it so. It is that an opened bottle lasts two or three days, and a list with twelve wines by the glass opens twelve bottles on a quiet Tuesday.
There are only three levers, and all three work. Put fewer wines by the glass on the list — six that turn over earn more than twelve that stand waiting. Have the floor actively recommend one wine the moment a bottle is open, so it finishes on the night it starts. And keep whatever does stay open under gas or vacuum, which moves the clock from three days to well over a week.
Cost it once for your own venue: an €8.50 bottle that ends up half in the sink costs you €4.25. If that happens three times a week, that is over €650 a year — for wine nobody ever drank.
6. The line with the best margin is not the one you think
Ask an operator which drink earns the most and the answer is almost always wine or cocktails: those are the highest prices on the list. But a margin is not a price, it is what is left once the VAT, the product and the loss have come off.
Below is where one euro of three different drinks actually goes. Same list, same room, three completely different outcomes.
That is not an argument for scrapping your wine list — wine sells food and keeps guests at the table longer. It is an argument for knowing which line carries your margin, so you know which line to push when it is quiet. The coffee after dessert is the cheapest revenue in the building, and it is the one almost nobody actively offers.
Three drinks from the same list, each shown as 100% of its own menu price. VAT first, then the product, then what you pour but do not sell — what is left is your margin.
The most expensive drink on the list keeps the least, and the cheapest product keeps the most. So never read your drinks list on price alone: what the floor recommends on a quiet night should be the line with the biggest green bar, not the biggest number on the page.
7. You count once a year, and on the wrong day
Without a count, everything above is theory. But an annual stocktake for the accountant tells you nothing useful: by the time you see the difference, nobody remembers which month caused it.
Once a month is enough, provided it is always the same day, the same hour and before the delivery. Otherwise you are comparing a Monday morning with a Saturday night and measuring your own rota instead of your loss. Count only the five lines above; a stocktake that tries to include everything stops being done after two months.
What you are looking for is not a perfect number but a trend. Two months in a row at 4% loss on beer is noise. Four months running from 4 to 9 is a person, a line or a habit, and then you know exactly where to look.
Put your own five lines beside it
Fill in what is on your list, what you pay for it, how many you sell a week and how much you think you lose. The five lines are pre-filled with the figures of a 55-seat brasserie so you can see immediately how it reads — overwrite them with yours.
Every line gets its own pour cost against its own band. Underneath sit three numbers: your blended beverage cost against the target that follows from your own revenue mix, what you pour a year without selling it, and what your lines are short on price.
Pour cost scan
Five lines, your own VAT rate, and the difference in money per year.
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The bands are guide ranges for independently run European venues and apply to revenue excluding VAT. They take no account of your concept, your city or your supplier terms. Everything is worked out in your browser; nothing is sent or stored.
Two things to know when you read it. The loss and the price shortfall are two different euros and may therefore be added: the first is product you bought and never sold, the second is what a line is short on revenue even if not a drop goes missing. They also call for different answers — one you fix behind the bar, the other on your list.
And the percentage still sticking out above the band is the consequence of those two, not a third problem. Do not add it on top, or you count the same money three times.
What you do with it this week, this month and this quarter
Nobody closes seven leaks at once. This order does work, because each step makes the next one measurable.
This week — get the arithmetic right once
- Look up the VAT rate you hand over on drinks and recalculate your five lines on the price excluding VAT.
- Put its band beside every line. One or two will fall outside it; note which, and do nothing else yet.
- Count on one evening how many wines by the glass you have open and how many actually finish that night.
- Put a line or a jigger on the glass that goes most often: usually house wine or spirits.
This month — measure instead of estimating
- Count your stock on fixed days: same day, same hour, before the delivery. Only the five lines above.
- Compare what is gone with what was sold and enter your real loss percentages in the scan above.
- Walk the line with the highest loss and find the cause physically: measure, foam, breakage, or bottles standing open too long.
- Prune your wine-by-the-glass list to what genuinely turns over, and keep the rest under gas or vacuum.
This quarter — lock it in, and only then price
- Put the three monthly counts side by side and read the trend, not a single figure.
- Revisit the purchase price of your two biggest lines: on volume, that is the conversation with the most leverage.
- Only now adjust your prices, and only on lines that sit above their band even with zero loss.
- Put the scan in your quarterly rhythm alongside your prime cost — drink and food belong in the same conversation.
Margin is not on your list, it is in your glass
Almost every operator who works this through finds the same pattern: the prices are right and the execution is not. The list is sharp enough, the buying is reasonable, and still somewhere between ten and twenty per cent of one line disappears between the bottle and the bill.
That is good news, because raising prices costs you guests and pouring better costs you nothing. A line on a glass, six wines by the glass instead of twelve, and one count a month on a fixed day — that is the whole recipe, and in a venue of average size it is usually worth a few thousand a year.
Then do the same with the other half of your buying. Food cost works in exactly the same way, and together they make up your prime cost — the one figure that really decides whether anything is left at the end of the year.