Customers 'resent' price of pub soft drinks

Resentment of soft drinks prices in pubs has reached "critical mass", with 63% resenting paying so much when they are so much cheaper in shops.

That's according to a survey of 1,000 over-16s by Mintel for its new On-trade Soft Drinks Report. It recommends a two-tier pricing system for soft drinks, with lower prices for draughts that offer better margins.

The report says: "With just over three in five adults resenting paying so much for soft drinks in pubs/bars when they know they are much cheaper in shops, this issue has reached critical mass.

"People are increasingly drinking alcohol in the off-trade instead of the on-trade, due mainly to cheaper alcohol, and pubs risk giving them further reason to drink at home."

In addition, 29% say the quality of soft drinks is "generally not as good as in cafes or restaurants".

The report flags up "quality issues" around draught. Feedback from a focus group found people "generally had negative experiences with soft drinks on draught", such as the drink tasting flat or watered down.

In total, 41% want a greater choice of soft drinks in pubs — 10% like it when a pub sells a soft drink they can't get elsewhere.

Although premium soft drinks have recently become more common in pubs, the market is still dominated by colas and lemonades at the expense of other popular brands such as Fanta, Irn-Bru and Dr Pepper.

But some improvements have been made — 28% say there's a better choice of soft drinks in pubs than a couple of years ago.

The report says the on-trade decline in soft drink sales will continue during 2010 and steadily increase year-on-year as more people return to pubs.

Of the different drinks categories, juices will be the "biggest winner" — growing 12% over next five years. Fizzy soft drinks and bottled water will perform "steadily" but energy drinks will "continue to decline".

Ties 'hamper progress'

Supply ties are hampering innovation among soft drinks in pubs, the report claims.

It says the current distribution structure of the industry is "partly to blame for the failure of many pubs to adapt and meet consumer demand".

It says Britvic and Coca-Cola Enterprises (CCE) generate 80% of the on-trade soft drinks value and have "strong ties with managed and tenanted pubs".

"This means that most of the value of soft drinks, not to mention the innovation, is being driven by independently owned pubs that have a minority share of the market."

The report adds: "More unusual premium soft drinks are being developed with pubs in mind.

"However, many have small distribution, predominantly in independent pubs that have fewer ties with Britvic and CCE."