Paul Wigham, chief executive of pub group All Our Bars, hit out against price rises and backed up comments made by fellow multiple site operator Tim Bird in the Publican’s Morning Advertiser last month.
No increases in ingredient cost
He said: “Grain and barley prices have halved since 2012, fuel is at its lowest price for years, meaning delivery costs must have been reduced, there’s no wage inflation-I don’t understand how priced can be going up.
“Last year saw a marked increase in the level of customer price queries that we received, coming as it did after well publicised duty reductions. We finished up writing an open letter to customers in many outlets to explain that our prices were adjusted to reflect brewer price increases that we were unable to explain. I have never had to do that before.
Customers querying prices
“The input prices for beer are reaching a point where the price we have to charge could be beyond the reach of some average customers – certainly on a regular basis. Just look at how midweek trade has deteriorated in the last 15 years for operators. There is more money for the operator in wine, spirits, minerals and food and at this rate, those will become the key wet products of pubs and the tradition of beer will dissipate further.”
Wigham argued that percentage price increases are often higher than they seem, because brewers apply price increases to apply increases to the gross price of barrels, including duty.
"For example, a £9.98 increase per barrel on the wholesale barrel price of £523 looks like 2% but when you remove duty, the wholesale barrel price was (£523-£123=) £400, so the increase is really 2.5%."
The All Our Bars chief executive said he had received letters from Molson Coors and Diageo confirming they will be upping their prices but publicly commended Greene King who have said they will not by raising theirs.
Cheshire Cat pub company operator Tim Bird has previously told the PMA that he would, where possible, stop stocking brewers who raised their prices, and that he also experienced a growing number of customers questioning pubs raising the price of a pint after hearing about cuts to duty.