BEVERAGE CONTROL

The term beverages are used to describe both alcoholic and non-alcoholic
drinks. The term beverage, for the purpose of beverage control will refer to
those beverages with an alcoholic content. Alcoholic beverages refer to those
products which are consumed as a beverage, and contain a significant amount
of ethyl alcohol.

These products can be broadly classified as below:

1. Beer : A fermented drink made from grain and flavored with hops. It is
brewed and contains less than 10% alcohol.
2. Wine : A fermented beverage made from grapes, fruits, or berries and
contains 10 to 20% alcohol.
3. Spirits : Fermented beverages that are distilled to increase the alcohol
content of the product. It contains 40 to 60% alcohol.
4. Liqueurs : Flavored, colored and sweetened spirit and contain 50-60%
alcohol.

Objectives of Beverage Control :

It is more easy for a bar man to do a pilferage than the restaurant sever. The
control department must ensure that the beverages issued less beverages sold
should be equal to balance beverages available in the bar. Each drink sold is
correctly priced so that hotel does not loose revenue.

Beverage control is easier than the food control due to the following reasons :
1. There is less number of beverages as compare to food articles to handle.
2. Beverages are purchased in standard sizes and are sold as full bottles /
cans or a pre determined number of pegs / portions are taken out from
each bottle.
3. Beverages are not perishable so they can be stored for a longer period
without having a risk for getting spoiled. But storage of wines in a
particular way is important so that cork remains moist otherwise, it will
get corky.

The beverage control is more important than that of food control due to
the following reasons :
1. The bar man may bring his own drinks and sell them in the hotel and
pocket the receipt.
2. Bar man may sell drinks and pocket the money.
3. Beverages are more tempting than food.
 4. Beverages are more expensive and have lower food/beverage cost and
hence give better gross profit and net profit.
5. Cocktails are more expensive than straight drinks and bar man may sell
cocktail but bill for straight drink and pocket the difference.

PURCHASING :
Unlike food service where only one quality of product like egg, milk, bread,
pulses, vegetables etc.; in case of beverage products several levels of quality are
chosen. Different quality level of beverages is purchased for different types of
guests. Some guests may prefer to order very expensive beverages, other may
prefer medium level and yet another may order economical beverages. Thus
the beverage manager is faced with deciding not only whether to carry wine
beer, spirit, liqueur on the menu, but also how many different kinds of
beverages to carry and of what quality and quantity.

Brand Selection : The selection of brand of various beverages will entirely

depend upon clientele, geographic location, ambiance, variety available with
competitors, excise rules in the state where hotel is located, availability of
brands, storage facility, working capital, type of food severed, etc. Even in the
same hotel different restaurants brand requirement may be different. One
must be very careful in this area not to stock excessive amounts of beverages
that sell poorly. Again, beer is perishable, and great care must be taken to
ensure proper beverages movement. The bar manager must inform the
management regarding the brand requirement of guests.

Packaging : Before deciding what size of bottles are to be purchased it is

important to know that whether beverages are sold by bottles, glasses, pegs,
etc. In case hotel is selling beer by bottles only then beer in bottles are only
purchased and on the contrary if beer is also sold in cans or glasses then the
packaging of beer in bottles, cans, barrels (contains 111.33 liters draft beer),
kegs (contains 58.67 liters draft beer) is purchased so it is more economical for
hotel.

Receiving : It is comparatively easier to receive beverage than food products.

The reason is that beverage products do not very in quality in the same manner
food product do. For receiving food products the receiving department requires
proper location, tools, equipments, and expertise. But in case of beverages it is
important for the receiving department to check the brand, sizes, date of
manufacturing, seal, vintage year (In case of wine). He is also required to
compare the beverages received with the supply order.
There are six main sources for the supply of beverages :
1. Wine shippers
2. Whole Sellers
3. Beverage Manufacturers
4. Cash and Carry
5. Auction
6. L-1 or L-2 license holder’s shops.

In most of the states in India, the Indian Beverages can only be purchased
from the nearest government approved shop earmarked by the excise
department. But imported liqueur can be either directly imported or bought
through Government agencies.

When receiving beverages, the following key check points should be

verified :

1. Correct brand
2. Correct bottle size
3. No broken bottles
4. No damaged cans
5. Date of manufacturing
6. I S I mark for bottling
7. Correct vintage

If errors are detected, a credit memo must be filled out and signed by
both the delivery person and the receiving official.

Credit memo is prepared to record the additional information regarding any

discrepancy in the beverages received to the delivery invoice. The purpose of
preparing credit memo is to correct any differences between the purchase order
prepared by the purchase department and the delivery slip or invoice that is
signed at the time the beverages are received. If ten cases of X brand of beer
are ordered and only 9 cases of X brand and one brand of Y brand has been
received than Y brand will be returned and the note will be made on credit
memo. The credit memo will be signed both by delivery man and receiving
official. A copy of this will be returned to delivery man, a copy will be attached
with the invoice, a copy each will be send to accounts department, control, and
a copy will be also retained by the receiving department.
Beverage Storage :
Though the shelf life of most of the beverages is relatively long, alcoholic
beverages, especially wine, must be treated in a very careful manner. Beverage
stores must be secured and out of bound all employees except those who are
on duty. The beverage stores should be issued through window and no bar
employee should be allowed to enter in the bar store. The bar store key is
sealed before depositing with the time office and the bar store should not be
opened by any one else except the bar store staff. Only in case of emergency it
should be opened in the presence of at least three executives and a proper
record of drinks removed/issued should be made for bar store clerk to record
in his books subsequently.

Spirit Storage : Spirits should be kept in a relatively dry storage area at 70 to

80 degree Fahrenheit. The bottles can be stored in the cupboards in standing
position. The bottles should be kept in the boxes and this helps in counting
and issuing more easily.

Beer Storage : Beers should be stored at refrigeration temperatures of 36 to 38

degree Fahrenheit. The beers date of manufacturing should be kept in mind
while issuing the bottles. The bottles received first are issues first (FIFO).

Wine Storage : Wine storage is the most complex and time consuming activity.
The bar store man must know how to keep the different wines so that they do
not become corky. Red wines are served at cellar temperature / body
temperature. The white wines and sparkling wines are to be stored at lower
temperature. Wines improve with the age but only if it is properly stored.
Normally most of the wines are stored at 50 to 65 degree Fahrenheit. Heat is
an enemy of effective wine storage.

Wines must be also protected from direct sunlight. In old times, this was
achieved by storing wines in cellars or caves. The wine store room must not
have any direct sunlight coming to this room and it should not have excessive
fluorescent lighting. With regard to light, the rule of thumb for storing wine is
that it should be exposed only to the minimum amount necessary.

In case oxygen comes in contact with the wine it makes it corky. A proper
cork, kept moist at all times, protects wine from getting corky. The wine
bottles are stored in such a manner that the cork remains in contact with the
wine and thus stays moist. While receiving wines the corks should be
examined and if found leaking than should not be received. However, if cork
starts leaking after receiving the bottles than if wine is in good condition than it
should be consumed immediately and if not than it should be discarded.

Storage Records :
1. Cellar Inwards Book : This provides accurate reference to all beverages
incoming to the cellar and posting data for the cellar man’s bin cards.
2. Bin Card : These are provided for each individual type of beverage held
in stock records. All deliveries received and beverages issued against
requisitions are recorded in the bin card.
3. Cellar Control Book : This provides a record of all daily deliveries to the
cellar and the daily issues of each beverage from the cellar to the various
bars.
4. Beverage Perpetual Inventory Ledger : This is called a master ledger
and is prepared in the control or accounts office. It consists of cards
prepared for each.
5. Breakage Book : It records all breakages and spoilages.
6. Empty Return Book : Sometimes crates have empty bottles, than a
record is made. Some stores issue fresh bottles against empty bottles for
a better control. All empty bottles are properly counted and stored.
7. Hospitality Book : This is necessary to record the issues of drinks to
kitchens and other grades of staff as laid down by the hotel’s policy.
8. Inter Department Transfer : Inter department transfers should
accompany proper transfer slips.

Methods of Beverage Control :

The beverage cost can be controlled by different methods depending upon the
size of the establishment, the volume of business. The cost incurred to control
is very vital. No matter how vigilant the management may be but 100
percentage controls is very difficult.

The following are the main methods of beverage control.

1. Inventory System : This is the most common system of beverage

control. All beverages issued to the bar are added to the balance and
after deducting the consumption the balance is measured by the control
department at the end of shift of each bar separately. Each full bottle is
counted and used bottles are physically measured to know the actual
balance with the bar. The consumption shown by the bar man must
tally with the actual consumption (can be seen from the sale; by giving a
command the computer can give the detailed sale). This system is the
 most dependable for controlling the beverage sale but is time consuming
and requires experienced, qualified, dedicated and dependable control
staff. Shortages and overages both should be taken very seriously. All
shortages are debited to the bar man and overages are taken into hotel’s
inventory and the bar man is issued warning if overage is happening
more frequently.

2. Bar Cost System : This is quite similar to the basic food cost report.
This may be produced for each bar separately or one for all the bars.

3. Bottle Control System : The empty bottles are replaced fresh/filled

bottles. The bar store keeps all empty bottles under lock and key. It is
the simple and effective method for controlling beverages. But it is
useful for only small bars.

4. Standard Sale : The standard sale of all the beverages issued to the bar
is calculated. The total sale of the bar is calculated and compared with
the bottles issued; while calculating the sale the balance drinks with the
bar man is also considered. This system is useful when most of the
drinks sold are either full bottled or straight drinks.

5. Bars for Banquets : Full bottles are issued to the bar man and any
bottle which is opened is charged to the party. The sealed bottles are
returned to the store after the function is over along with a copy of the
check raised for the party.

6. Beverage Dispensing System : The drinks are dispensed through

dispensing machine and the machine is called ‘Berg’. The drinks poured
are the standard and there is neither a fear of over pouring nor of under
pouring. This system though is very expensive but saves time, very
efficient and accurate.

ISSUING :
The basic principles of product issuing that apply to food and supplies also
apply to beverages. There are, however, special concerns that must be
addressed when issuing beverage products. It should take place at a set time
during the day and only against a requisition signed by an authorized person.
For example: Bar Manager must counter sign each requisition or it should be
signed by any person authorized by him. Bar stores, like other stores, are
issued at a specific time to specific bars. To avoid delays, the large requisitions
should be handed over to bar stores a few hours to a day in advance. This
helps stores department to take out all beverages before hand and at the
stipulated issue time the stores is issued without any delay and hassle.
Requisition notes are usually made in triplicate. Original copy is retained by
the store department, first carbon copy goes to control department and the last
copy of retained in the book for the bar’s records.

The pricing of issues for beverages is different from that for food. In this, two
prices are recorded, the cost price and selling price. The cost price is recorded
to credit the bar stores accounts and for trading accounts and balance sheet
purposes. The selling price is recorded for control purpose to measure the
sales potential of selling outlet using this basic formula

Total Beverages Consumed or Beverage Sales = Opening Stock + Purchases –

Closing Stock

Total Beverages Consumed = Sales = Revenue

Beverage Consumed = Beverage Revenue

The main objective of beverage stock taking is as follow:

1. To determine the total value of all beverages held in stock. This will
indicate if too much is held in stock and if it is the financial and catering
policies.
2. To compare the actual value of beverages held in the cellar at a specific
time.
3. To identify slow moving beverages.
4. To minimize pilferage and check security and control system.
5. To determine the rate of stock turnover.
6. To ensure that the bar staff is not procuring their own beverages illegally.
7. To control the short pouring or selling without proper B.O.T’s and
Checks.

Beverage Production Methods :

The term beverage is used to describe both alcoholic and non-alcoholic drinks.
The beverages can be classified as follow:
1. Raw Beverages : These are the beverages that require a high degree of
preparation in comparison to the other categories. Before serving to the
guest, these beverages have to be cooked to a certain degree. For
example tea and coffee; these may require up to five minutes before
serving.
 2. Semi-Prepared Beverages : These are the beverages that do not need to
be prepared from the raw products state but they are not ready to serve.
For example; Fruit Cordials, which only requires the addition of water,
cocktails may also be included in this category.
3. Fully Prepared Beverages : These are the beverage products requiring
no preparation before being served to the customer. For example: fruit
juices, wines beer, etc.

Bar Frauds :
1. Short pouring
2. Using personal drink measuring devices.
3. Diluting liquor with water and keeping the cash from additional drinks
sold.
4. Bringing the liquor purchased personally, selling the contents, not
recording the sales and pocketing the cash.
5. Not recording the sale of individual drinks until they add up to the
normal number of drinks from a full bottle, then recording the sale for
the full bottle and pocketing the difference (It is only possible if hotel is
having different rate for full bottle and pegs).
6. Selling drinks and recording them as spoilage, complimentary or walk-
out.
7. Overcharging a number of drinks served to a group who will be paying
the bill later.
8. If automatic drink measuring and dispensing devices are used then
obtaining the contents, say for five drinks, spreading this content into six
glasses and pocketing the cash for the 6th glass.
9. Over pouring drinks to influence a large tips.
10. Using private sales checks rather than those authorized by the
hotel/bar
11. Reusing the checks already settled.
12. While making checks only original copy is made and after getting
the payment carbon copies are priced for fewer drinks.
13. Exchanging the empty bottles with full bottles without requisition.
14. Using a fraudulently obtained credit card to convert cash sales into
charge sales and pocketing the cash.
15. At a banquet function, removing full bottles for personal use and
transferring them in the sale or the bottles consumed.
16. Pre-recording and registering the sales of drinks at lower than
normal prices during happy hours and pocketing the cash difference
when these drinks are actually sold at normal higher prices.
17. Not recording sales of soft drinks as the sales revenue from these
is often not controlled by many bars.
18. Breaking a used empty bottle and claiming it to be an accident and
receiving replacement that can be sold for cash.
19. Short pouring cocktails that contain a number of different
alcoholic ingredients with extra amounts of non-alcoholic ingredients like
cream, egg white, etc.
20. Selling cocktails but showing them as direct spirit sale. Usually
hotels charge higher price for cocktails than for direct spirits.