The owner of Jameson whiskey and Jacob's Creek wine plans to raise prices this month, citing an increase in the cost of doing business.

Irish Distillers told its trade customers yesterday that it would impose an average increase of 3.2 per cent across its whiskey range, which includes the Paddy and Powers brands. The company declined to provide a breakdown of price hikes for individual whiskey brands.

Jameson, which has been distilled in Ireland for more than 200 years, grew volumes by at least 10 per cent last year and continues to capture a significant share of the domestic spirits market, Irish Distillers said in May.

However, the company now needs to recoup some of the rising costs of production by introducing the first increase in whiskey prices since January, 2003.

Other drinks to receive price rises will include West Coast Cooler, which will go up 5.6 per cent, and the company's wine portfolio, which will see prices climb an average 0.2 per cent.

Irish Distillers described West Coast Cooler earlier this year as one of the country's "most dynamic brands", with growth of almost 30 per cent in 2005.

"The increases we have announced are very modest in the context of the general increase in the cost of doing business and the need to recover a portion of those costs so that we can continue to invest in our brands, production facilities and our stocks of maturing whiskey," a spokesman for Irish Distillers said.

Some publicans, however, believe the price hikes are unnecessary and will exacerbate the downturn in spending in pubs sparked by the introduction of the smoking ban in 2004.

"The pub industry cannot take any more hits," according to the manager of a traditional central Dublin pub. "It's already too quiet on Mondays, Tuesdays and Wednesdays.

"And people have less money nowadays, what with mortgages rising and the cost of everything else going up."

Irish Distillers attributed its price increases to inflation and higher energy costs, up more than 10 per cent and 30 per cent, respectively, since the start of 2003. It also cited higher costs for raw materials, packaging, distribution, labour and other overheads.

Diageo, the world's largest producer of alcoholic drinks, raised the price of Guinness last year and in 2004. More than 200 Dublin publicans refused to co-operate with the marketing activities of the brewing giant in a row over price increases in 2004.

When drinks manufacturers put up their prices, retailers and the pub trade traditionally follow.