Beer Arbitrage

Via Skimpy‘s Google Reader Shared Items, I have discovered this wonderful website: It’s the wikipedia of beer prices. Users e-mail in the price of a pint of beer wherever they live or travel, and the data are updated down to city level. The listed price of a pint in Bombay, for instance, is USD 1.82 – which is accurate enough.

The website also lists the ten cheapest, and the ten most expensive countries in the world for a beer. What’s really interesting is that in Rwanda, a pint is only 0.32 GBP, while in neighbouring Burundi, it’s at least three times more – 0.94 GBP in Bujumbura, and a whopping GBP 5.51 in Burundi City.

Imagine the arbitrage opportunity at the border! This, I feel, is the future of finance – FX traders carrying yen will be replaced by beer traders carrying Urgwagwa.

0 Responses to Beer Arbitrage

  1. Banjo says:

    Just like students from Bangalore can try it on their counterparts in Ahmedabad?

  2. Aadisht says:


    Bangalore and Ahmedabad are sadly not across the border. Though yes bootleggers in D&D (or is it D&NH) profit from the step function rise in prices at the border.

  3. Vaibhav says:

    I would not want to jump to the conclusion that there is a huge arbitrage opportunity here. This could be much like the Leftist rant that our farmers are exploited by middlemen and traders who make super normal profits. It will be worthwhile to examine the transportation costs from Rwanda to Burundi, not to miss other possible costs like ‘safety’ cess, import duties and levies, ‘suvidha shulk’ etc.

  4. Aadisht says:


    I had taken it for granted that the price differential is because of safety cess, levies, et cetera. I think I’m becoming too cynical that way. In that case the arbitrageur would become a bootlegger/ smuggler.

    By the way, I don’t know about the middlemen and traders in the agricultural supply chain but if you look at the P&L statement of say an HUL or ITC distributor you’ll see that the gross profit margins are on the order of 3% (since GPMs are based on VAT returns, they’re much more difficult to fudge – so you can’t even explain this by saying that the profit is being underreported). So no supernormal profits there, even though a distributor will have a geographical monopoly. The price markup in the supply chain mostly foes towards paying for its inefficiences, and not to the personal bank accounts of the people who control it.

  5. Vaibhav says:

    Absolutely. So maybe, after all the incidental expenses, NPM still works out to about 3%, or less for a beer trader/bootlegger. And may be the high point is not the margin, but the asset turns. Being able to sell on cash/advance, while keeping the inventory low, our entpreneur gets 12 turns a year. RoI is a cool 36%, significantly better than a HUL distributor’s. Pls let me know if there is an IPO on cards.

  6. Masabi says: is a rocking cross-reference of all beers available in NYC. Find a beer (the rarer the better), click on it, and find a list of all bars that serve it.

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