Yesterday (Tuesday 13 January), the global brand told The Morning Advertiser (The MA) it would be upping the cost of Guinness Draught from April this year as operational costs continue to rise for the business.
Under the new pricing structure, Guinness Draught will jump by 5.2%, equating to around 40p a pint.
Owner of Barr & Barr Hospitality, which owns three pubs in West Sussex and Dorset, Rob Barr, told The MA he was surprised by the “extreme price hike”.
He continued: “As with all businesses we are challenged heavily at present with the Government’s tax raid on businesses, from national insurance contributions to business rates and the stubbornness not to support the industry with a VAT reduction. But this is moving their products into unaffordable pint bracket very soon.
“Operators will have to pass this increase on. How is this supporting their loyal customers – both punters and stockers.”
Rising costs
The cost of a 70cl bottle of Smirnoff vodka will also increase from April, by 13p. Guinness 0.0, Guinness Microdraught, Guinness Draught in 440ml cans, Baileys, Casamigos and all RTDs will not be impacted by the mark-up.
Last year, Diageo, which does not set the retail price for Guinness, upped the price of the black stuff by 4.2%.
At the Dog & Partridge in Yateley, Hampshire, the price of a pint of Guinness has increased from £5.50 to £6.50 over the past three years and will rise to £6.90 once the new pricing structure comes into force and essential gross profit margins are maintained.
“Diageo seem hell bent on having the first £10 a pint beer,” director Mark Edgell told The MA.
“Pubs are being forced to add huge increases to the price of a pint beyond what the public will find acceptable.
“With rising energy costs, two recent rounds of national minimum and living wage increases, rises in national insurance (NI) contributions and lowering of NI thresholds, beer duty increases and high VAT rates, along with a recent business rates valuation increase of 74% here at the Dog & Partridge, this price hike from Diageo is just another slap in the face.
“I enjoy a Guinness myself, it is my beer of choice, but I will be exercising my choice to drink something else and I’m sure others will too.
Loyal following
“It is sad to see them penalise the consumers of their flagship product, the very product that has given them great sales growth from a growing and loyal following.”
However, a Diageo spokesperson told The MA the company had kept price rises to a minimum, adding the increase would allow the company to continue investing in its brands and support hospitality customers.
One pub operator, who didn’t wish to be named, said: “If you are not a massive wholesaler with thousands of customers you get penalised. Large wholesalers get a discount, while the smaller operators are faced with an increase.
Reports from the trade suggest while Diageo is saying the increase is 5.2%, some claim to have seen rises nudging towards 7%.
This comes after several operators told The MA they had struggled to get hold of some Guinness products, including Guinness Draught in keg format and cans of Guinness 0.0, before Christmas and were still being restricted or not receiving orders.
However, Diageo assured on-trade customers it was “business as usual” for the brand and that Guinness supplies were plentiful.
