Trade hit by brand price hikes

Licensees are facing a year of rising costs with three major drinks suppliers set to introduce significant price rises.

Twelve months on from their last price hikes Coors Brewers, Carlsberg UK and Diageo have announced they will be increasing the wholesale price of a number of their brands starting early next month.

From February 6 Coors Brewers will increase the price of brands including Carling, Grolsch and Worthington's by 2.5 per cent - well above the current 1.5 per cent rate of inflation.

The Burton-based brewer has justified the rise because of the increasing cost of raw materials, as well as growing packaging and distribution costs.

Diageo has confirmed that it will be increasing the price of draught Guinness for the second successive year. Not only that but it will also be raising the price of Pimms and Gordon's gin and, for the first time in more than five years, Bailey's.

The drinks giant has defended these prices rises. A spokesman said: "We have invested a huge amount in these brands over the years and we will continue to do so. The price increases will enable us to continue to increase investment and our customer activities.

"For example aligned with activity around 6 Nations rugby linked into our status as official beer of the British and Irish Lions, Guinness will be the most visible brand in the on trade during February and March."

Interbrew UK and Scottish Courage have confirmed they will not be hiking their prices for the moment, but it looks likely that rises will follow in the spring.

Scottish Courage said its prices were under review. "We last changed our prices in March 2004 and we need to take into account any changes to prices of raw materials. We anticipate we will let our customers know of our decision in the next month or so," said the company.

Meanwhile, a statement issued by Interbrew UK said: "In line with its commitment to review prices only once per year, Interbrew UK will not be reviewing its prices until May."

Many licensees will be in the dark as to how much of these price increases will be directly placed on them by their pub companies. Punch Taverns confirmed it was reviewing its pricing strategy and would make an announcement to its customers as soon as a final decision was reached.

Who is increasing prices, why and when?​

Diageo​

• Guinness - Wholesale price of keg up by £3.54 (which equates to a recommended increase of 8p per pint)
• Gordon's gin - 1.7 per cent (per 70cl bottle)
• Pimms - 2.5 per cent (per 70cl bottle)
• Bailey's - 4.5 per cent

Reason:​ Recent investment in brands and need for future investmentWhen:​ February 1

Coors​

All beer brands to increase by 2.5 per cent

Reason:​ Increased costs (raw materials, packaging and distribution)When:​ February 6

Carlsberg​

Prices for lager and ale brands will increase by an average of four per cent

Reason:​ Increased costs including fuel and high energy costsWhen:​ February 14

All three companies raised their wholesale prices at exactly the same time last year, with Coors beer brands climbing by five per cent, Carlsberg at 4.9 per cent and the price of a keg of Guinness increasing by £2.09.