Peg Cost and Pour Cost: How to Price a Drink and Know Your Liquor Margin

A bar's menu prices are usually set once, by feel, and then left alone while supplier prices change around them. Two numbers fix that: the cost of one peg and the pour cost. Both take a minute to work out, and both tell you more about the bar than the monthly profit figure does.

The cost of one peg

Start with the bottle.

Peg cost = bottle cost ÷ pegs in the bottle

A 750 ml bottle holds 25 pegs of 30 ml, or 12.5 pegs of 60 ml. A 1 litre bottle holds 33.3 small pegs.

Bottle	Bottle cost	Pegs (30 ml)	Cost per 30 ml	Cost per 60 ml
750 ml whisky	₹1,800	25	₹72	₹144
750 ml vodka	₹1,400	25	₹56	₹112
1,000 ml rum	₹900	33.3	₹27	₹54

Use the price you actually paid, including any tax that is a cost to you, not the MRP.

Pour cost

Pour cost % = peg cost ÷ selling price of the peg × 100

A 30 ml whisky that costs ₹72 and sells for ₹300 has a pour cost of 24%. The other 76% pays for everything else: rent, staff, glassware, ice, the licence and your profit.

Pour cost is useful because it puts brands on one scale. A ₹600 single malt peg and a ₹180 well rum peg are hard to compare in rupees, but easy to compare as percentages.

Margin per peg

Percentages hide one thing: rupees. A premium brand at a 30% pour cost may still earn more per peg than a well brand at 15%.

Peg (30 ml)	Cost	Price	Pour cost	Margin per peg
Well rum	₹27	₹180	15%	₹153
Vodka	₹56	₹240	23%	₹184
Whisky	₹72	₹300	24%	₹228
Single malt	₹180	₹600	30%	₹420

Price by both numbers. Pour cost tells you whether a price still makes sense after a supplier increase. Margin per peg tells you which drinks to push.

Why the real pour cost is higher than the menu

The menu assumes every peg is exactly 30 or 60 ml and every peg is billed. Real bars lose liquor in ways that never reach the bill:

• Over-pouring. A 35 ml "30 ml" peg is a 17% over-pour, and it adds up across hundreds of pegs.
• Free pours and comps. A drink for a regular or a staff member still empties the bottle.
• Spillage and breakage. Small and constant, but real.
• Unbilled drinks. A peg served and not rung up is the most expensive peg in the bar.

None of these show on the menu. They show up as a gap between what your books say should be on the shelf and what is actually there. That gap is the variance, and it is the real pour cost minus the theoretical one.

Our guide to bar stock variance explains how to measure it, and the free bar variance calculator shows the gap for each brand in ml and in rupees.

A monthly routine

1. Update bottle costs from the latest supplier bills.
2. Recalculate peg cost and pour cost for every brand.
3. Flag any brand whose pour cost has drifted up since the last menu change.
4. Compare book stock with a physical count, in ml, for the same period.
5. Reprice or retrain, depending on which number moved.

How Novota BVR helps

Novota BVR counts every open bottle in ml, with a Bluetooth scale, by voice, or by dragging a line to the liquid level, and compares it with opening stock, purchases and sales brand by brand. The variance report shows where the liquor went before the month closes, not after.