As Katie said, a lot of the problem is supermarkets selling at cost or as a loss leader which maens that it is ridiculosuly cheap. BUT the real issue is our culture of booze (it's still relatively expensive here compared to most of Europe). Just one issue among many but I think a big problem in pubs is that we still have a beer heavy, round buying, swigging culture (which is good on a social level) but have replaced 3.5% bitters with 5.2% premium lagers withour toning down the volume drunk. When I first went to pubs about 80% of beer drunk was bitter. Plus woman have joined in far more than in the past due to social and cultural change, greater economic independence and female friendly pubs. Go for a drink with someone in the US and it often maens 1 or 2 drinks! Few places abroad have our after work drinking culture for example.etc etc