Guinness price hike latest in 'massive and rapid' increase in cost of running pubs
The price of a pint of Guinness going up again is another stressor for rural pubs, the Vintners Federation of Ireland (VFI) have warned.
Diageo, which brews Guinness, Hop House 13, and Rockshore among other drinks, announced on Tuesday that the price of a pint of their drinks, including Guinness, will increase by 7c, excluding VAT.
With this meaning that the consumer could be spending an extra 20c a pint on average, the VFI have said that this is the latest blow to an already strained pub trade — with spokesperson Brian Foley saying that, while they don’t set prices, some of their members will have no choice but to raise their prices.
The price of a pint of Guinness going up again is another stressor for rural pubs, the Vintners Federation of Ireland (VFI) have warned. Pic: Artur Widak/NurPhoto via Getty Images
‘We don’t negotiate price or advise on price, but having said that, we’re very concerned about the increased cost of pubs having to do business,’ Mr Foley told Extra.ie. ‘Alcohol is the most expensive part of any pub, so an increase from a major supplier like Diageo is going to have a huge knock on [effect] on our members.’
With the latest price increase coming into effect on February 2, this means that it’s the third price increase in the last 12 months — with Mr Foley saying that this is the latest blow in a trade that is already under pressure from rising costs on all sides.
‘When you factor in the cost of drink, the introduction of the pension auto-enrolment, increase in minimum wage, associated costs of running the businesses, it’s all increased massively and rapidly. This is just another significant factor.’
Pic: Anton_Ivanov/Shutterstock
‘The average price of stout now is €6.08, back in 2012 it was €3.96. It’s increasing every year, and it’s a huge concern, for sure.’
While touristy pubs in cities such as Temple Bar will probably be okay with the price hikes, the VFI’s main concern is in rural pubs outside of Ireland’s main cities, which will really feel the pinch, particularly their customers, who will definitely notice the difference in price.
‘I was chatting to a rural publican yesterday, and they were saying their customers are a lot more price sensitive,’ Mr Foley said. ‘They were saying this will really impact their midweek trade — the customer who’ll come in in the midweek for a couple of pints — that’s what they’re worried about. These sorts of increases will affect someone more in Monaghan than Temple Bar, for sure.’
Pic: Artur Widak/NurPhoto via Getty Images
With January and February usually being a lull in business, the price hikes couldn’t have come at a worse possible time, either — with Mr Foley adding that the real busy ‘season’ for a pub only begins around St Patrick’s Day in March. And, if price hikes are to continue at this rate, some places could be charging on average €7.50 a pint by 2029 — something that could spell disaster for the small publican.
‘We’re in a situation where more alcohol is being consumed at home now than it was 20 years ago,’ he warned. ‘Around 20 years ago, more alcohol is purchased in an off-licence setting than on-licence, and customers will have a tipping point beyond which they’ll stay at home. Prices are increasing every year, and that’s a huge concern, particularly for small publicans.
As for whether the black stuff could be pulled from pubs as a result of Diageo’s price hikes, Mr Foley doubts it — as Guinness is still the most popular pint out there.
‘I think I’ve been to two pubs ever where they didn’t serve Guinness,’ Mr Foley joked. ‘Guinness is a huge brand, and of course, it’s in most pubs.
‘What publicans do with the price hikes is, again, up to them, and sure, there are other products, but Guinness is… Guinness.’
After Diageo announced the price hikes due to ‘industry-wide pressure,’ the VFI said that most publicans will have no choice but to pass on the rises to the consumers, which in turn could lead to closures of some pubs that are already on the brink.
‘Publicans are being hit from all sides, but drink costs are the biggest burden they face,’ VFI CEO Pat Crotty said. ‘This latest price increase from Diageo will put even more pressure on pubs that are already operating on extremely tight margins. Many will be left with no option but to pass this on to customers, which helps nobody.’
‘This isn’t just about the price of a pint. It’s about the long-term viability of pubs across the country. Community pubs are being pushed to the brink, and continued increases in drink prices only accelerate that trend.’
