A good old fashioned beer war has erupted between two popular Perth bars, and the low prices have drawn thousands of punters to both of their Subiaco locations.

When the Village Bar initially made the move to drop their price for a pint of their "beer of the month" from $10 to $4 for the entire month of January, it seemed this was going to be the lowest Perth beer prices had dropped since the 1980s.

Both venues have been battling it out for Perth's cheapest beer price.

But then their neighbours, less than 1km up the road, did them one better.

The Vic Hotel dropped their pint prices – for both Rogers and Swan Draught - to just $3.50 a glass, and owner Bevan Marwick said the response from Perth punters craving a cheap drink was immediate.