# Tiers for Beers

## A popular statistic overstates the case for deferred pub drinking.

The financial organisation Company Debt claimed:

Every adult in the UK will have to order 124 pints of beer this year to bring pubs back to their pre-COVID levels.

Headlines repeated that number, in the Daily Mirror, Metro, Evening Standard, and elsewhere.

As a whole, the food and accommodation services industry fell by around 43% from 2019 to 2020. The impact of the pandemic remains stark:

# How did they calculate the ‘124 pints’ figure?

The calculation goes as follows:

- “Latest estimates suggesting that the UK’s food and beverage industry lost at least £25.66 billion due to COVID-19”.
**Their article does not give a primary source for this estimate.**The two stated sources are Morning Advertiser (a pub trade magazine) and Statista. - The estimated loss from the “food and beverage industry” is then applied
*only*to pubs.**Pubs are a major part of this industry, but not its whole.** - The analysts divides estimated loss by the population estimate of UK adults.
**The company claims Eurostat has the figure at 52m.**For January 2019, the Eurostat estimate is 52.6m. The Office for National Statistics gives a 2019 adult (18+) population estimate of about 52.7m. - Last, that loss per adult converts into pints, glasses of wine, roast dinners, and packets of crisps.
**Company Debt do not provide a source for these conversion factors.**

# What is wrong with this figure?

In 2017, the ONS estimated annual turnover for public houses and bars was about £23bn. It is implausible the industry suffered a “market value loss” of over £25bn.

The Morning Advertiser reported a Lumina Intelligence projection of £14bn losses in 2020 (61%). Pubs suffered a greater reduction compared to other food and accommodation services.

The British Beer & Pub Association estimates a loss of £8.2bn, referring only to beer sales:

£8.2 billion in trade value wiped out from the sector in beer sales alone.

Also, the adult population estimate is a bit low; the average beer price in their calculation is too high.

In one press release, the BBPA implies the average beer print price is £3.90. Analysis by a price comparison website suggests an average pint price of £3.94.

# What should the figure be?

**It is uncertain.**

If we use the BBPA beer loss estimate as a lower bound, then it is around 39 beers per adult (at £3.90 each).

If we take £22bn to £24bn as an estimate of pub industry turnover in 2019, then¹:

**45% reduction:**48–53 beer pints per adult. This is in line with all food and accommodation services.**65% reduction:**70–76 beer pints per adult. That reduction is a little higher than Lumina Intelligence’s projection.

Rounding, the loss in turnover was about 50-75 pints per adult.

We could get technical: treating the 2019 industry size and 2020 fall as random variables. Based on modelling assumptions², the 90% interval is 58 and 76 pints per adult. The central estimate is 68 pints. If you change those assumptions, the interval also changes.

Non-alcoholic alternatives are available.

¹This calculation uses a UK adult population estimate of 52.673m and average beer price of £3.90.

²Here, I model the 2019 industry estimate as a Normal distribution with mean 23,000 and standard deviation equal to 300. The reduction is a Beta distribution with shape parameters 62 and 40. I ran 10,000 simulations in R.