Pub landlord shares staggering amount of money he actually makes on each pint

A landlord has delivered an ‘eye-opening’ breakdown of how much profit Scottish establishments are making on a pint of beer, and it isn’t looking good.

The UK’s hospitality sector is in serious crisis, with worrying data revealing that one pub a day permanently closed up shop in England and Wales in 2025.

Over in Scotland, pub profitability was down by 75 percent from the previous year, with drinking habits, financial constraints, and cheaper home alternatives all being blamed for the decline.

If you still go to your local, then you may have noticed that the price of your regular pint of bitter or lager shandy has recently risen.

According to business management consultancy firm, CGA Strategy, the average price of a beer in Scotland was £4.42 in May 2025, while London beverages cost around £5.44.

A hospitality expert is myth-busting alcoholic beverage prices (Bryn Colton/Getty Images)

Stephen Montgomery, spokesman for the Scottish Hospitality Group and owner of Our Place restaurant in Annan, has explained that while your alcoholic drink may feel more expensive, there’s still very little profit in it for the pubs.

In a video posted to LinkedIn, Montgomery - who has previously run numerous other pubs, restaurants and hotels in Scotland - explained that after you hand over £6 for your pint, one sixth of it goes ‘straight to the VAT man’.

30 percent of the remaining net cost is taken off to pay for the actual beverage itself, while 60 percent is subtracted to pay ‘beer duty’, an excise tax levied on all alcoholic beverages.

In the UK, beer and spirits are taxed in proportion to their alcohol content, and cider and wine according to the volume of liquid sold, as per the Institute of Alcohol Studies.

After the VAT, beverage cost, and alcohol levy is taken off, the ‘next big cost’ is bar staff wages.

The Scottish Hospitality Group director reasoned that this costs around 25 percent.

Additionally, bars and pubs across the country have to pay 30 percent to National Insurance and PAYE, while 20 percent is used to pay ‘running costs’, such as accountants, cleaning, banking, and insurance.

Stephen Montgomery claims he may make 13p on a £6 pint (ITV)

“15 percent of the cost of your pint maybe goes to the bank your mortgage or to your landlord as rent,” he continued. “Three percent goes in utilities, gas, electric, [and] water.

“A couple of pounds for that then goes on the ‘climate levies,'" Montgomery said, referring to the UK’s energy tax known as the Climate Change Levy (CCL).

An additional two percent is subtracted to pay for business rates.

After everything is taken off, only around 25p of your £6 pint goes back into the pub owners pockets, according to the businessman’s estimations.

But the payments aren’t done there, with six pence of the profit being spent on corporation tax.

“And if I pay it to myself, another six pence of that goes to dividend tax.”

If Montgomery’s estimations are accurate, then for every beer sold, he may end up with around 13p in take home pay.

He reasoned that while we should be paying our taxes, perhaps they shouldn’t be as high as they are.

“If you tax a business and an industry like license hospitality to death and to the point where they just can’t survive anymore? They can’t run a business, nobody gets any money,” he concluded.

Reams of LinkedIn users have hopped in the video’s comments, with one calling the video an ‘eye opener’.

“The pub is so much more than a business though it's at times the heart of a community,” they continued, “It's the place people socialise and meet friends. For elderly people it can be a place to ease loneliness and isolation. It's often the place were young people start a lifetime of employment particularly students etc.” (Sic)

They went on to remark that the number of pub closures in the UK is ‘shocking’, and called on the UK and Scottish governments to ‘do more to support the vital hospitality industry’.

A second LinkedIn said: “Shocking ... Interesting and painful to watch at the same time.”

Someone else commented: “Really good Stephen. We desperately need to highlight the stark difference in tax takes from different sectors and businesses. Business Rates rises are going to be the final straw for many.”

Rachel Reeves, Chancellor of the Exchequer, said she was ‘particularly concerned’ about the impact of rising business rates on pubs last week.

Rachel Reeves has said she is 'concerned' about pubs as business tax continues to rise (BBC)

Speaking on BBC Breakfast, she confirmed there was ‘additional support coming’ before new levies come into effect in April.

"I think that people can see that the biggest impact and the biggest concern right now is around pubs,” the 46-year-old claimed.

"Some of the smallest businesses, particularly some cafes, don't pay any business rates at all because they're not big enough to do so."

It’s understood business rates will increase over the next three years as Covid-era support is phased out. Property values are also due to be adjusted to reflect a return to normal business after the pandemic, as per the BBC.