Most bars lose money on cocktails because they guess at pricing instead of calculating properly. A cocktail with €2 in ingredients needs a minimum €8 selling price to stay profitable. You'll discover the exact formula bartenders use to price drinks correctly.
The formula for cocktail prices
For cocktails you use the pour cost, the equivalent of food cost but for beverages. The formula is:
Pour cost % = (Cost price of ingredients / Selling price excl. VAT) × 100
For a profitable bar you keep your pour cost between 18% and 25%. At 25% pour cost you calculate your minimum selling price like this:
Minimum selling price excl. VAT = Cost price / 0.25
💡 Example:
Cocktail with €2 cost price at 25% pour cost:
- Minimum price excl. VAT: €2 / 0.25 = €8.00
- Plus 21% VAT: €8.00 × 1.21 = €9.68
- Rounded: €9.50 or €10.00
Selling price: €10.00
VAT on alcoholic beverages
Here's where many owners mess up: alcoholic beverages get hit with the 21% VAT rate, not 9% like food. This bumps your selling price higher than dishes.
⚠️ Watch out:
Many business owners forget the 21% VAT on alcohol and accidentally calculate with 9%. Then your cocktail ends up €1-2 too cheap.
What do you include in the cost price?
For cocktails you count everything that goes into the glass:
- Spirits: vodka, gin, rum, whiskey
- Mixers: tonic, cola, juices
- Garnish: lime, olives, cherries
- Ice cubes: calculate €0.05-0.10 per cocktail
- Syrups: simple syrup, grenadine
💡 Example Gin Tonic:
Cost price per cocktail:
- Gin (4cl): €0.80
- Tonic (15cl): €0.45
- Lime (1 wedge): €0.15
- Ice cubes: €0.08
Total cost price: €1.48
Different pour cost percentages
Your establishment type determines which pour cost percentage you can target:
- 18-20%: Cocktail bars, lounges (higher margins)
- 22-25%: Restaurants with bar, cafés
- 25-30%: Happy hours, promotions (temporary)
Lower pour costs mean more profit per cocktail. But your prices need to stay competitive in your market. And here's a pattern we see repeatedly in restaurant financials: bars that aim too low on pour cost often price themselves out of their customer base.
💡 Pour cost comparison:
€2 cost price at different percentages:
- 20% pour cost: €12.10 incl. VAT
- 25% pour cost: €9.68 incl. VAT
- 30% pour cost: €8.07 incl. VAT
Check competitive prices
After calculating your minimum price, scout the competition. Visit 3-5 similar establishments and note their cocktail prices. Your price should fall within that range, otherwise you'll sell too little (too expensive) or leave money on the table (too cheap).
How do you calculate the right cocktail price? (step by step)
Add up all ingredient costs
Calculate what each ingredient costs per cocktail: spirits, mixers, garnish, ice. Add everything together for the total cost price per cocktail.
Choose your desired pour cost percentage
Determine which percentage fits your establishment: 18-20% for cocktail bars, 22-25% for restaurants with bar. The lower the percentage, the higher your margin.
Calculate minimum selling price
Divide your cost price by your pour cost percentage: €2 / 0.25 = €8 excl. VAT. Add 21% VAT: €8 × 1.21 = €9.68. Round to €9.50 or €10.
✨ Pro tip
Track your top 3 selling cocktails weekly for pour cost accuracy. If those three maintain proper margins, you've got 70% of your bar profit locked down.
Calculate this yourself?
In the KitchenNmbrs app you can do this in just a few clicks. 7 days free, no credit card.
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Frequently asked questions
Should I calculate 9% or 21% VAT on cocktails?
Alcoholic beverages always get 21% VAT, even in restaurants. Only non-alcoholic beverages consumed on premises are charged 9% VAT.
What's a realistic pour cost for my bar?
Cocktail bars typically run 18-22%, while restaurants with bars aim for 22-25%. The more specialized your cocktails and higher your service level, the lower your pour cost can be.
Should ice be included in the cost price?
Absolutely, calculate roughly €0.05-0.10 per cocktail for ice cubes. It seems tiny, but over thousands of cocktails per year it really adds up.
Can I use different pour cost percentages per cocktail?
Yes, you can set premium cocktails at 18-20% and standard cocktails at 25%. This maximizes your profit per drink type and gives you pricing flexibility.
📚 Sources consulted
- EU Verordening 852/2004 — Levensmiddelenhygiëne (2004) — Official source
- EU Verordening 853/2004 — Hygiënevoorschriften voor levensmiddelen van dierlijke oorsprong (2004) — Official source
- EU Verordening 1169/2011 — Voedselinformatie aan consumenten (2011) — Official source
- NVWA — Hygiënecode voor de horeca (2024) — Official source
- NVWA — Allergenen in voedsel (2024) — Official source
- Codex Alimentarius — International Food Standards (2024) — Official source
- FSA — Safer food, better business (HACCP) (2024) — Official source
- BVL — Lebensmittelhygiene (HACCP) (2024) — Official source
- Warenwetbesluit Bereiding en behandeling van levensmiddelen (2024) — Official source
- WHO — Foodborne diseases estimates (2024) — Official source
Food Standards Agency (FSA) — https://www.food.gov.uk
The HACCP standards shown in this application are for informational purposes only. KitchenNmbrs does not guarantee that displayed values are current or complete. Always consult the FSA or your local authority for the latest regulations.
Written by
Jeffrey Smit
Founder & CEO of KitchenNmbrs
Jeffrey Smit built KitchenNmbrs from 8 years of hands-on experience as kitchen manager at 1NUL8 Group in Rotterdam. His mission: give every restaurant owner control over food cost.
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