You have had one too many drinks and you are now in the queue at the bar. You order your usual whiskey on the rocks and the bartender asks, “What does that cost per drink?” You reply, “Don’t know, a few dollars I think.” The bartender then says, “No, what does it cost after tax?” You reply, “Well, I suppose it would depend on what kind of tax you are paying.” The bartender then answers, “There is no tax in this example.” You say, “Oh, you must be in a really cheap county or city.” The bartender then replies, “No, turns out I’m in a really expensive one.” You say, “That’s outrageous! Why pay that much for a drink?” As you sip your whiskey, you start feeling a little foolish for having quipped the whole thing off. You glance at the sign on the wall behind the bar that reads, “Warning— this is not a tax-deductible expense.” You then decide to pay for your drink with a credit card as the bartender rings it up. You drive home thinking about all the money you just wasted in one night. You are now committed to paying for that round of drinks every time you visit the bar. What do you do?
Let’s learn some drinking economics. A lot of people are in denial about how expensive drinking can be. They think that it costs a lot just to drink in a bar or restaurant; this couldn’t be further from the truth. Bars and restaurants don’t charge you for drinks; they make a large profit off of snacks and other items that they sell. This is why most bars and restaurants try to up-sale drinks as much as possible. You will often see signs posted at the entranceway that read, “No discounts on drinks and bottles,” which is code for “Yes, we know how expensive alcohol is and we want your business.”
The drinks at a bar or restaurant are generally made with high-proof grain spirits (similar to whiskey or vodka) or fruit juices. The cheaper the alcohol, the more it will taste like water or cheap liquor. To cut costs, bars and restaurants use low-quality ingredients and high-pressure methods to make their drinks.
Alcoholic beverages are generally taxed by the government to help pay for the costs of policing and prosecuting crime. The types of taxes vary by state and can range from a flat rate to a percent of sales tax or duty on alcohol. For example, in Indiana the tax is 4.99%, while in Maryland it is normally between 5% and 6.5%. In some states, including New York, you have to pay a separate tax on each drink if you are buying it in a bottle or can. Some bars and restaurants are located in untaxed or duty-free counties, which can help them save a lot of money. This can lead to a lot of competition and put additional pressure on bars and restaurants to up-sale their drinks. Even in these situations, though, you will find costs that are pretty high due to all of the overhead that is involved in running a bar or restaurant (e.g., rent, insurance, and utilities).
The Bar And Restaurant Majors
There are a few major industries that are involved in manufacturing, selling, and serving alcoholic beverages: wineries, breweries, distilleries, and restaurant and bars. These are the industries that make up what is known as the alcohol “vertical” (or drink “vertical”). You will find a lot of industries within the alcohol vertical, such as wine makers, beer makers, and whiskey producers. Some of the largest and most recognizable brands in the world are made by the companies that you will find within the alcohol vertical, such as Absolut, Beck’s, and Jim Beam.
The Major Brand Buds
While the above-mentioned brands all make up part of the alcohol vertical, they do not necessarily represent the entirety of the industry. There are also some smaller brands that you may recognize, such as Old Crow, Galliano, and Southern Comfort.
The reason why you should care about this is that many bars and restaurants will only stock the major brands of alcoholic beverages due to cost and convenience. Smaller brands simply can’t compete on a price basis and will therefore be abandoned by the bartender if you don’t ask for them specifically. Luckily for you, we know where to find the expensive stuff if we want it. As a result, we can get the whiskey we want without having to worry about whether or not the bar will have it in stock. While this might not seem like an advantage, keep in mind that many bars will mark up the cost of the cheap stuff by a thousand percent or more just to make a profit off of it (e.g., Jack Daniel’s Red). The markup is generally due to all the costs that are involved in making a low-quality product (e.g., rent, insurance, utilities, transportation, labor, food cost, etc.).
Why Should You Be Careful What You Order
When you go to the bar or restaurant, you will notice that they have a wide variety of drinks to choose from. This is because bars and restaurants want to make sure that they appeal to as many people as possible and don’t want to limit their customer base to just those people who want to drink beer or whiskey. Even outside of American bars and restaurants, there is a wide variety of alcoholic beverages to choose from, including many European varietals that you may not have heard of before (e.g., Lambrusco, Champagne, and Grappa). While this may sound like a good idea, take a closer look at the costs that are associated with this. If you are not sure what kind of drinks are available at the bar or restaurant, ask before you order. Sometimes the drink you want may not be available, and if it is, it will most likely be served in a glass or bottle that costs a lot more than the plastic cup you are used to getting at the neighborhood bar. Before long, every drink you order will cost you a fortune and you will begin to regret putting yourself in that situation. When this happens, it is usually because you have exceeded your budget for the evening or have spent more money than you initially planned on. To avoid this trap, make sure to read the restaurant or bar’s menu carefully before ordering and get the drinks you need from there (e.g., don’t order a bottle of wine when they only serve pints).
To give you some relief, bars and restaurants will sometimes have happy hours where they offer discounted drinks or complimentary snacks. These are times when you may save a lot of money, so be sure to take advantage of them. If you are at a bar or restaurant and you notice that the drinks are particularly good, you should order them. Some bars and restaurants even offer half-price drinks during these hours, which can make them pretty attractive. If you are there with a group of friends and you get a good feeling about the bar or restaurant, you can ask the bartender for some cocktail recipes that you can make at home. This will help reduce the amount of money you waste at the bar and allow you to have one last drink before heading home. It is also a great way to socialize. Bars and restaurants are not places where you should necessarily go to escape from your troubles; they are places where you can meet people with whom you can share your problems and maybe even find some solutions.