Instead of raising a pint to their customers, the big global brewers have been raising the cost of those pints.
On Tuesday, Heineken said it will increase the price of all its draught products by 3.1 per cent from the middle of February.
Citing cost increases, the brewer’s pints of lager, stout and cider are likely to climb by about 20 cent once VAT is added and publicans’ margins are factored in.
The brewer said its business “continues to face cost increases and, while we are committed to finding and acting on ways to reduce those costs, we unfortunately need to amend our pricing”, it said in a statement to The Irish Times.
READ MORE
The news came just two weeks after Diageo said it was increasing the cost of a pint of Guinness by seven cent – also likely adding 20 cent to the price of a pint in your local after adjustment for VAT and margins.
In a sea of negative news, however, one independent brewer is rowing against the tide of price inflation.
Pat Falvey, owner of the Blarney Brewing Company in Co Cork, followed Heineken’s news by saying on Wednesday that his company will be cutting the wholesale price of its Hydro Lager by 3.16 per cent, “effective immediately”.
“At a time when much of the brewing industry continues to implement price increases, Blarney Brewing Company has taken a different decision,” said Falvey, noting the brewery is “doing our little bit to save Irish pubs, jobs and heritage”.
The decision, he wrote, “has been made possible by a reduction in the cost of key raw materials, including malt and hops, which the industry has experienced in recent months, alongside the stabilisation of energy costs across the market”.
With the price of an ounce now more than $5,000, why is everyone going for gold?
Timing of the price reduction notification is no coincidence. Falvey also announced a price freeze for the year in the aftermath of the news from Diageo that it was set to increase the price of its products.
He noted the “billions in profits” taken home by the giants of the alcohol drinks market, instead positioning his company as providing an affordable alternative.
Realistically, both decisions are largely astute marketing moves, but there is a grain of truth to what Falvey is saying about input costs.
It raises the question: if a small Cork brewery has been able to find cost savings that enable it to cut prices, surely the giants of industry could find scope, given their business acumen, to cut their prices too ... if they wanted to, that is.
