Trade offsets beer sales slump with price rises

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The pub industry has survived by continually raising prices against a rapid decline in the volume of beer sold in the on-trade over the past decade,...

The pub industry has survived by continually raising prices against a rapid decline in the volume of beer sold in the on-trade over the past decade, according to a new report.

Market information company Key Note found that in 1990 the volume of beer sold in the on-trade accounted for 80 per cent of the total market, but by 2000 this had fallen to 68 per cent.

However, the value of beer sold during this period fell by only six per cent to still account for 77 per cent of the market.

The report said this was a result of a combination of a shift by drinkers to premium beers and by the need for publicans to increase bar prices to both pay for pub refurbishment and to offset the cost of "free" entertainment such as satellite television. Competitive pricing in the take-home market, particularly in supermarkets' aggressive pricing, has also affected the value of beer sales.

This backs up the findings of The Publican's Market Report 2001, a survey of more than 1,000 licensees, which revealed that the average price of a pint had broken the £2 barrier for the first time.

Licensees agreed that prices were rising and attributed it to the increasing costs of running a pub.Tony Payne, chief executive of the Federation of Licensed Victuallers Associations, said customers may begrudge paying more for beer but would have to "look at the value-for-money the pub offered them".

The Key Note report also revealed that the continued consolidation of the industry has led to the regional brewers' market share falling by two per cent to 10 per cent between 1991 and 2001.

According to Key Note this represents - to the 50 long-established regional companies and several hundred smaller operators - a loss of £320m of sales in a beer market worth a total of around £16.4bn.

Scottish Courage now has the top market share of the UK brewing industry, with 30 per cent. Bass Brewers is second with 23 per cent, followed by Whitbread (17 per cent), Carlsberg-Tetley (13 per cent) and Guinness (seven per cent).

The value of the beer market itself has risen by 9.4 per cent since 1996 and is forecast to increase in value by 8.8 per cent by 2005.

Related topics: Beer

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