Tenanted sector to be hit by price rise

- Last updated on GMT

Related tags: Dudley breweries, Cost, Public house, Beer

The controversial divide between tenanted and managed pubs over beer discounts is set to take an uncomfortable step in the wrong...

The controversial divide between tenanted and managed pubs over beer discounts is set to take an uncomfortable step in the wrong direction.

Wolverhampton and Dudley Breweries and Coors Brewers have both announced price increases affecting brands including Carling, Worthington, Grolsh, Banks's Bitter and Marston's Pedigree.

The move will affect mainly tenanted operations which will be forced to pass the price hikes on to their customers - resulting in as much as 15p-a-pint increases.

At the same time, many managed house operators are slashing drinks prices to add appeal in a competitive high street market.

Spirit Group has just announced plans to offer super-low prices including Carlsberg at £1.65 and Tetley's at £1.50 a pint - prices that tenants will find impossible to match.

Spirit follows in the footsteps of other operators including JD Wetherspoon, with its famous 99p a pint offers, Laurel and Yates (See City Page 10).

From the end of the month, Wolverhampton & Dudley Breweries will put up the price of beer by 3.5 per cent.The hike will affect more than 1,100 pubs under its tenanted arm, the Union Pub Company, but not the company's 480 managed houses.

Shaun Addison, of the Banks's Harbour pub in Hull, East Yorkshire, told The Publican Newspaper: "I'm not best pleased. I'm trying not to pass the increase on to my customers but it will cost me an extra £400 a month if I don't."

Jack Lynn, licensee of the Acton Arms, in Bridgeworth near Wolverhampton, added: "It's a little ill-conceived considering the state of the economy and the January blip."

Marketing director for the company Peter Jackson said: "This increase is reflective of the cost of raw materials, distribution and fuel. We have also faced additional legislation costs and national insurance contributions and pensions."

In response to Coors' price rises, Kevin Shields, licensee of the Hogshead in Cheltenham, Gloucestershire, said: "I'm stocking Carling as a trial offer at the moment - this will make me think twice."

Prices will increase between £9 and £15 for a barrel of Carling, Worthingtons and Grolsch.But John Holberry, sales director, said: "We only put up our prices when we have to."

Tony Payne, chief executive of the Federation of Licensed Victuallers Association, said it was "unfair to put prices up for one and not for the other".

"How are tenants expected to compete?" he asked. "It's unfair trading. If they're going to put prices up for the ontrade then they should increase them for supermarkets and off-licences as well."

Meanwhile, London-based brewer Fuller's is currently reviewing its prices with an increase expected soon. Rooney Anand, brewing and brands managing director for Suffolk-based brewer Greene King, said it would be reviewing its prices next month but couldn't rule out an increase. Scottish Courage and Shepherd Neame could also follow suit later in the year.

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