drinks-margin

---
name: drinks-margin
description: Works out the cash profit in every drink you sell, measure by measure, ranks the bar by the money it actually makes rather than by percentage, and finds the gap between what you should have taken and what you did. Use when the bar is busy and the bank account does not show it.
---

# Find out where the money on your bar really is

You give this your drinks list with its prices, the last delivery invoices from your drinks suppliers, the bottle and keg sizes, the measure you pour, and a till sales report for a stated period. You get back every line costed per measure, the cash gross profit each one makes, the whole bar ranked by money rather than percentage, and the difference between the profit the sales say you made and the stock says you did. It never states a measure, a price or a yield it has not been given.

## What it does

1. **Fix the measure you actually pour, and check it is one the law allows, before costing anything.** Every yield calculation downstream depends on this single number, so it goes first. For gin, rum, vodka and whisky, Business Companion, published by the Chartered Trading Standards Institute with government backing, states these "are required to be served by the glass in one of these quantities: 25 ml, 35 ml, multiples of 25 ml or 35 ml". For wine, "Wine by the glass must be sold in the following quantities: 125 ml, 175 ml, multiples of 125 ml or 175 ml". For draught, "Draught sales of beer, lager and cider must be made in one of these quantities: 1/3 pint, 1/2 pint, 2/3 pint, multiples of 1/2 pint". Write down which single spirit measure the house pours, because you may not run 25ml on the optic and 35ml free-poured on the same bottle and still know what your margin is. Record whether the required notice is displayed and whether the wine measures appear on the list, because a measure the customer cannot see is a trading standards problem sitting on top of a margin problem.

2. **Build one row per sellable line, with the pack, the cost excluding VAT, and the measures it yields.** Columns: category, brand, pack size in millilitres or litres, cost per pack excluding VAT from the most recent invoice, measure poured, measures per pack, cost per measure, selling price including VAT, selling price excluding VAT, cash gross profit per measure, gross profit percentage. Do the yield arithmetic explicitly and show it: a 70cl spirit bottle poured at 25ml yields 28 measures, the same bottle poured at 35ml yields 20, and that one choice moves the cost per measure by 40 per cent. A 75cl wine bottle yields six glasses at 125ml, three at 250ml, and four at 175ml with 50ml left in the bottle that has to go somewhere. A 50 litre keg is eleven imperial gallons and therefore 88 pints before a drop is lost to the line. Take the VAT out of the selling price before you calculate any margin, because gross profit on a VAT-inclusive price is not gross profit.

3. **Deduct the yield you actually get, not the yield the bottle contains.** Nobody gets 28 measures out of a 70cl bottle. There is what stays in the neck, what goes over the side of the jigger, the measure poured and rejected, the first pint off a fresh keg, and the line cleaning. Set a stated allowance per category, write it in the output as a number you chose rather than a fact, and cost the measure on the reduced yield. Keep that allowance constant for the whole exercise so the comparison between lines stays honest. If you have never measured it, say so and use the theoretical yield, clearly labelled, rather than inventing a shrinkage figure. A made-up wastage percentage quietly becomes the explanation for a real loss later, and that is the most expensive mistake available in this job.

4. **Cost cocktails and mixed drinks by their parts, including the parts nobody counts.** Take each cocktail on the list and write every component with its volume: every spirit, liqueur and modifier in millilitres, the juice, the syrup, the mixer whether it comes from a bottle or a gun, the garnish, and the ice if you buy it in. Cost each at the invoice price per litre or per kilo, then add them. A cocktail sold at a proud price can carry a worse cash margin than a pint once three spirits, a fresh citrus and a dehydrated garnish are added up, and it takes four minutes of a bartender's time to make. Show the build cost, the price excluding VAT, the cash gross profit and, separately, the make time in minutes, because on a Saturday night the make time is the real constraint and a drink that earns £6 in four minutes loses to one that earns £4 in forty seconds.

5. **Multiply every line by what actually sold, and rank the bar by cash, not by percentage.** Pull the units sold per line for the stated period from the till and multiply by the cash gross profit per measure to get the cash gross profit each line contributed. Sort descending. This is the step that changes the conversation, because percentage rankings put a rarely ordered aperitif at the top and the lager that pays the rent at the bottom. Report the top twenty lines by cash contribution with the running cumulative total and the percentage of total bar profit they represent, then the bottom twenty, then every line that sold fewer than a stated number of units in the period. Those slow lines are where your cash is sitting as stock on a shelf, and they are the ones to delist, not the ones with the lowest percentage.

6. **Reconcile what you should have made against what the stock says you made.** Count the bar stock at the start and at the end of the period, value both at cost, and take the purchases from the invoices. Jeffrey Morgenthaler's method, written for working bartenders, puts it plainly: "Pour cost is calculated thusly: it's how much booze you had when you started, plus how much you spent, minus how much you have on hand, divided by how much you sold." For part-bottles he says to "Take a look at your bottle and break it down into tenths in your mind. Decide where the liquid line falls and make an educated guess about the contents", and notes that "most bars tend to want to run at around 20-25%", while adding that it depends on the programme. Put the theoretical pour cost from step 2 next to the actual pour cost from the count. The gap between them, converted into pounds, is the number this whole skill exists to produce.

7. **Break the gap down into named causes before anyone blames anybody.** List the possibilities in order of how common they are and test each against evidence you can actually get: over-pouring where the house free-pours instead of using a stamped measure, drinks rung on the wrong button or a cheaper button, comps and staff drinks that never got rung at all, wastage not recorded, a keg or line problem, deliveries short against the invoice, and a till or stock count done badly. Quantify anything you can: a bar pouring 30ml where it charges for 25ml loses one measure in six, which on a 70cl bottle is four and a half measures gone. Where you cannot evidence a cause, say the amount is unexplained and leave it unexplained. Naming a person from a variance figure is how you lose a bartender and still have the variance.

8. **Choose three changes and show each one in pounds.** For each, state the change, the lines affected, and the cash effect over the same period the data covers. The candidates in order of how quickly they pay: put a stamped measure on anything free-poured, so the cost per measure becomes the one you costed; reprice the handful of lines where the cash gross profit is lowest and the volume is high, which is almost always the house wines and the bottled beers; delist the slow lines and take the cash out of the shelf; move the two or three highest cash-contribution drinks to the top of the list and to the top of what the bar staff offer. Three changes is the limit, because a bar that changes fifteen things at once learns nothing from the next count.

9. **Produce the sheet, the reprice list and the new drinks list wording.** Output three things. A costing sheet with every line, the columns from step 2, and the arithmetic visible so the owner can check a row by hand. A reprice list with the current price, the proposed price, both cash gross profits, and the effect on the period's takings if volume stayed flat. And the drinks list lines that have to change: the measures shown against wines, the notice about the spirit measure, and anything being delisted. Every changed price has to reach the printed list, the board, the till and the staff on the same day, or the till will keep charging the old one.

## Then it checks

1. Every spirit, wine and draught line uses a quantity permitted by the legislation quoted in step 1, and the output names which single spirit measure the house pours and whether the required notice is displayed.
2. Every cost per measure traces back to a named supplier invoice with a date, and no cost is carried forward from a previous exercise or taken from a supplier's list price rather than the invoice.
3. Every margin is calculated on the selling price excluding VAT, and no row mixes a VAT-inclusive price with a VAT-exclusive cost.
4. The yield arithmetic reproduces on every row: measures per pack multiplied by cost per measure equals the pack cost, after any stated allowance, and that allowance is shown as a number that was chosen rather than presented as a fact.
5. The cash gross profit ranking sums to the total bar gross profit for the period, and the units sold in the ranking sum to the units on the till report.
6. The variance between theoretical and actual pour cost is stated in pounds as well as percentage, and every part of it is either attributed to a named cause with evidence or explicitly recorded as unexplained.

Any check fails: name it, redo that step once. Failed twice: say what is wrong and stop.

## Rules
- Public information only.
- Never invent a fact, a number or a quote.
- Anything sent in someone's name says whose name it is.
- Never invent a wastage, shrinkage or spillage percentage. An allowance you made up becomes the explanation for a real loss, and the real loss then goes on for another year.
- Never state a legal measure from memory. The permitted quantities differ by drink, they have been amended more than once, and the version that matters is the one on the trading standards guidance on the day you check it.
- Never name an individual as the cause of a stock variance. A variance is arithmetic between two counts, and counts, tills and deliveries all go wrong before anybody steals anything.
- Never rank the bar by gross profit percentage alone in anything the owner acts on. A 90 per cent margin on two sales a month is worth less than a 55 per cent margin on four hundred, and percentage rankings are how bars end up delisting the drink that pays the wages.
- This output is a working document prepared for the owner's accountant and, on the measures and price display points, their trading standards adviser or solicitor to check before it is used. It states arithmetic on the figures it was given; it is not advice on weights and measures law, licensing or VAT.

## Built from
- The Weights and Measures (Intoxicating Liquor) Order 1988, https://www.legislation.gov.uk/uksi/1988/2039/made, made 16 November 1988 and in force 1 January 1989, read 14 September 2026: the primary instrument behind the measure rules, including that draught beer and cider are sold "only in a quantity of 1/3 pint, 1/2 pint or a multiple of 1/2 pint", which is the basis for step 1 and check 1.
- Business Companion, "Selling alcohol in licensed premises", https://www.businesscompanion.info/en/quick-guides/weights-and-measures/selling-alcohol-in-licensed-premises, last reviewed April 2025, read 14 September 2026: the current permitted quantities for spirits, wine and draught in the wording quoted in step 1, the requirement that the wine measure is "clearly indicated to customers on menus, price lists or on a displayed notice", and the statement that bottle-top pouring devices "must not be used to independently determine the quantity of measures of gin, rum, vodka and whisky", which is why step 8 puts stamped measures first.
- Jeffrey Morgenthaler, "How to Take Inventory and Calculate Pour Cost", https://jeffreymorgenthaler.com/pour-cost/, 10 April 2014, read 14 September 2026: the pour cost formula quoted in step 6, the tenths method for counting part-bottles, and the observation that most bars aim at 20 to 25 per cent, which is why the skill compares theoretical against actual rather than against a target.
- RichardBJamison/open-source-barware, https://api.github.com/repos/RichardBJamison/open-source-barware, 5 stars read from api.github.com on 14 September 2026: the open-source bar inventory project whose counts-and-variance structure confirmed the shape of steps 6 and 7.

# drinks-margin

## You are given

A folder from a UK bar, pub or restaurant containing some or all of: drinks supplier invoices (PDF, photo or CSV), a drinks list or menu with prices including VAT, a till sales report for a stated period with units sold per line, and an opening and closing bar stock count. The owner also states one thing in writing: the single spirit measure the house pours, which will be 25ml or 35ml. If it is not stated, ask once, then stop.

## Produce

Write all files into an `output` folder beside the inputs.

1. `drinks-costing.csv` - one row per sellable line. Columns exactly: `category,brand,pack_size_ml,pack_cost_ex_vat,invoice_ref,invoice_date,measure_ml,measures_per_pack,allowance_pct,measures_net,cost_per_measure,price_inc_vat,price_ex_vat,cash_gp_per_measure,gp_pct`.
2. `cocktail-costing.csv` - columns exactly: `cocktail,component,volume_ml_or_g,component_cost,build_cost,price_inc_vat,price_ex_vat,cash_gp,make_time_minutes`. One row per component, with the build cost repeated on each row of that cocktail.
3. `profit-ranking.csv` - columns exactly: `rank,category,brand,units_sold,cash_gp_per_measure,cash_gp_total,cumulative_cash_gp,pct_of_bar_gp`. Sorted by `cash_gp_total` descending.
4. `variance.csv` - columns exactly: `line,opening_stock_cost,purchases_cost,closing_stock_cost,theoretical_cost_of_sales,actual_cost_of_sales,variance_gbp,variance_pct,attributed_cause`. Use the cause `unexplained` where there is no evidence.
5. `reprice-list.csv` - columns exactly: `brand,current_price_inc_vat,proposed_price_inc_vat,current_cash_gp,proposed_cash_gp,units_sold,period_effect_gbp,reason`.
6. `bar-report.md` - under 900 words. The three recommended changes with the cash effect of each, the top ten and bottom ten lines by cash gross profit, the total variance in pounds, and a list headed "could not be costed" naming every line and why.

## Rules

- Calculate every margin on the price excluding VAT. Never mix a VAT-inclusive price with a cost.
- Every cost must trace to a named invoice and date in the `invoice_ref` and `invoice_date` columns. If there is no invoice for a line, put it in "could not be costed" and leave it out of the ranking.
- Do not invent an allowance for spillage or wastage. If the owner has not given one, set `allowance_pct` to 0, set `measures_net` equal to `measures_per_pack`, and say in `bar-report.md` that the theoretical yield was used.
- Do not state, assume or correct the legal measure for any drink. Use only the measure the owner stated and the pack sizes on the invoices.
- Never name a person in `attributed_cause`.
- Round money to two decimal places. Round `measures_net` down to a whole measure.

## Return

One line per file written, with its full path and row count, then the total variance in pounds, then the count of lines that could not be costed. Nothing else.