InBev: Pubs can afford to charge more for beer

By Lucy Britner

- Last updated on GMT

Related tags Artois brewer inbev Price

InBev: Pubs can afford to charge more for beer
Pubs can afford to charge higher prices for beer and should adopt a more flexible policy, according to Stella Artois brewer InBev. InBev's managing...

Pubs can afford to charge higher prices for beer and should adopt a more flexible policy, according to Stella Artois brewer InBev.

InBev's managing director of on-trade sales Steve Kitching said licensees are restricting profits by not being flexible with their prices and adapting to the modern market.

Meanwhile, Fuller's has said it has "significantly reduced" its use of Stella across its pub estate, believed to be in response to falling demand for the lager.

Kitching said some licensees are guilty of "treating beer like petrol" by having a "price point ceiling in mind, which they are wary of breaching".

"Pubs need to move to a pricing system that reflects how the beer category is developing.

"Traditionally, pubs had a limited range, but as more brands come on to the market, retailers' approach to retail pricing needs to change to reflect this."

Kitching said "extra cold", "premium" and "world lager" brands make the range more extensive.

He added there had been a shift in the way prices are determined.

"Traditionally, retail pricing was determined purely on margin terms based on retailers' need to make a certain percentage profit.

"Today it's more about what consumers are willing to pay, but there is still some way to go," he said.

Fuller's food and beverages buyer Andy Hall said: "We have a flexible pricing policy that is reliant on geography and premium and non-premium brands, but all price increases have to be within reason."

Punch Taverns category manager for beer and cider Steve Martin said: "We don't determine retail pricing, but it's true to say that premium and world lagers should be priced higher, as they are a point of difference.

"But prices can't keep going up and up when they keep coming down in the off-trade."

Sales of Stella Artois were down 0.7% for the first three months of 2006 and Hall said: "Stella has been significantly reduced across our estate."

But Martin insisted: "Stella is our number one selling premium draft lager."

An InBev spokeswoman denied the brewer was about to raise prices and said it only has one review each year. This year's was in May.

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Your Comments Sandra Fitschen​ via email 18/07/2006"I have just read the artical by Inbev. I cannot believe this man is suggesting we increase our prices! Is this the same company that has contracts with all the leading supermarkets? How are we supposed to increase our prices when the supermarkets are supplied with Stella and other top brands at a prices so low they are selling them cheaper than we can buy them!.

Once again pubs are expected to increase the divide between us and the supermarkets so causing the probable reason for the drop in pub customers.

I was originaly going to write in reply to John Ellis ( MA. 13th july) in agreement with his letter but this artical incensed me more.

Are they trying to close all pubs?"

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