How to Price a Peg in Your Bar: Simple Liquor Pricing Guide

Many bar owners set peg prices by looking at the bar next door, adding a little, and hoping it works out. Then the month ends, the stock is gone, and the profit is far lower than expected. The problem is usually not the price on the menu — it is that nobody knows the real cost of each peg, brand by brand.

This guide shows you a simple way to work out what one peg actually costs you, how to set a price that leaves a healthy margin, and how to protect that margin once the bottle is open.

Step 1: Know how many pegs are in a bottle

Start with the basics. A 750 ml bottle gives a certain number of pegs depending on your peg size. If you pour 30 ml pegs, a 750 ml bottle has 25 pegs in theory. If you pour 60 ml (a "large"), it has 12 and a half.

In practice you will rarely get the full number. A little liquor sticks to the bottle, some is lost while pouring, and free-hand pours are never exact. So it is wise to plan with a slightly lower number — for example, 24 pegs from a 750 ml bottle at 30 ml — and treat anything better as a bonus.

Step 2: Calculate the cost per peg

Cost per peg = Purchase cost of the bottle ÷ Usable pegs per bottle

Here is an example. The numbers are only for illustration — use your own purchase price.

• Bottle purchase cost (including the taxes and charges you actually pay): ₹1,800
• Usable 30 ml pegs per bottle: 24
• Cost per peg: ₹1,800 ÷ 24 = ₹75

Do this for every brand you stock. Premium brands, regular brands and house pours will all have different costs, and a single price list across brands almost always leaves money on the table somewhere.

Step 3: Decide your pour cost target

Pour cost % = (Cost per peg ÷ Selling price per peg) × 100

Pour cost is the bar version of food cost. If a peg costs you ₹75 and you sell it for ₹300, your pour cost is 25%. The remaining 75% has to pay for rent, staff, glassware, ice, mixers you do not charge for, electricity, licence costs and your profit.

There is no single "correct" pour cost for every bar. A high-rent lounge in a mall needs a different margin from a neighbourhood bar. Work backwards from your monthly expenses: add up your fixed costs, estimate how many pegs you sell in a month, and see what margin each peg must carry for the business to make a profit.

Step 4: Set prices brand by brand

Once you know the cost per peg and your target pour cost, the price is simple:

Selling price = Cost per peg ÷ Target pour cost

Example: cost per peg ₹75, target pour cost 25% (0.25). ₹75 ÷ 0.25 = ₹300. Then round to a clean number that fits your menu.

A few practical tips:

• Premium brands can carry a lower percentage margin but a higher rupee margin. Guests expect to pay more, and each sale still brings good money.
• House pours and cocktails are where many bars earn their best margins. Cost the full recipe — liquor, mixer, syrup, garnish — not just the liquor.
• Keep your price list consistent. If a 60 ml is exactly double the 30 ml price, there is no reason for guests to upgrade. Some bars price the large peg slightly below double to encourage it — just make sure it still clears your margin.

Step 5: Plan happy hours and offers carefully

"Buy one get one" and happy hour prices bring in crowds, but they can quietly destroy margin if not planned. Before you run an offer, calculate the pour cost at the offer price. If a ₹300 peg becomes two pegs for ₹300, your pour cost doubles from 25% to 50% on those sales.

That can still make sense if the offer fills slow hours, brings in food orders, or turns first-time guests into regulars. But decide it on purpose, run it for fixed hours, and check the sales report afterwards to see whether it actually paid off.

Step 6: Protect the margin after the bottle is open

Even a perfect price list fails if pegs disappear. The most common leaks are:

• Over-pouring — free-hand pours that are a few ml heavy on every peg.
• Unbilled pegs — drinks served to friends or regulars without a bill.
• Wrong brand billed — a premium brand served but a cheaper one billed.
• Spillage and breakage that is never recorded.

Simple controls help a lot: use jiggers or measured pourers, make it a rule that no drink leaves the bar without a bill, and count open bottles at every shift change. When the counted stock does not match what was billed, you know exactly where to look.

Step 7: Review prices when costs change

Liquor purchase prices, duties and charges change from time to time. When your cost changes, your pour cost changes the same day, even if your menu price does not. Review your price list at least every few months, and immediately after any cost increase.

Liquor pricing, MRP rules and the taxes that apply to alcohol are set by each state and can change. Always confirm your pricing approach with your excise consultant or CA before you print a new menu.

How DUOZENT helps

DUOZENT is built for bars as well as restaurants. You can set peg sizes and prices for each brand, and every peg billed is deducted from stock automatically. The Bottle Count feature lets staff record open and sealed bottle levels at shift change, and the Leakage Report compares what was billed with what was actually used — so over-pouring and unbilled pegs show up quickly. Item-wise sales reports show which brands and offers actually make money, and the excise register keeps daily brand-wise stock records ready.

Want to see your real cost per peg and where your stock is going? Book a free demo — 14-day free trial + free leakage report.