Big brewers deal price hike blow to pubs: Ross

by John Harrington Stuart Ross, chief executive of Scottish brewer and pubco Belhaven, has hit out at the "hugely inflationary" price rises...

by John Harrington

Stuart Ross, chief executive of Scottish brewer and pubco Belhaven, has hit out at the "hugely inflationary" price rises announced by two major brewers that he says will be "unsustainable" for pubs.

But Coors and Carlsberg UK said the recent price rises were necessary because of higher fuel and energy costs.

Belhaven increased the price of its own beers by £8 per barrel last month, roughly in line with inflation.

But the Belhaven boss took a swipe at the recent increases from Coors and Carlsberg UK, which ranged from 3.2% to around 6.2%

"Coors and Carlsberg have increased their brands by around £15 a barrel and that's hugely inflationary," he said.

Ross added that the increase would hit the pub trade hard. He points to the downturn in trade in Ireland following the smoking ban there last year, and said pub sales could be hit especially hard in Scotland when the smoking ban comes into force in Spring 2006.

"The Irish drop in trade [in pubs] is not just to do with the smoking ban but consumer perception of the price of drinks. I can't see how their businesses in the long term can be sustainable.

"The brand owners have to take that message from the Irish consumer and make sure they don't make the same mistake."

Carlsberg UK spokeswoman Donna Creswell said: "What [Stuart Ross] perhaps doesn't realise is that we have added costs that are much higher than the rate of inflation. A big issue has been fuel and energy costs that have risen steeply."

Coors on-trade sales director John Holberry said its price rises were "due to significant increases in raw materials, energy, distribution and packaging costs".

Ross said that for the last two years the company had also partially absorbed the price increase of Tennent's lager, the biggest selling lager in its pubs, for its 255 tenants and lessees, to give them the opportunity to boost profits by increasing their prices by inflation at the point of sale.

New prices

(per 36-gallon barrel)

Carlsberg UK:

Carlsberg: £327.71, up £15.43 (4.9%)

Carlsberg

Export: £376.30, up £18.06 (5%)

Tetley's

Smoothflow: £293.55, up £11.40 (4.04%)

Tetley's Cask: £287.83, up £9.03 (3.2%)

Coors:

Carling: £331.09, up £14.99 (4.74%)

Grolsch: £378.62, up £22 (6.17%)