Cathal O’Donoghue, co-founder of Rascals Brewing Company in Dublin, said the increase in his monthly gas bill has been “mind-boggling” and he is facing a 1,000 per cent hike in prices.
The brewery, which O’Donoghue set up with his wife Emma Devlin in Inchicore in 2014, locked in its electricity contract for two years last December but it is out of contract on the gas bill. This has left it with an eye-watering increase: the cost per kilowatt of gas has risen from two cent to 20 cent.
“It is actually ridiculous,” O’Donoghue told The Irish Times.
Beer production involves cooling beer and keeping it cold, which is an electricity cost, but the financial pain is most acute on the gas, which is used to generate steam in the brewing process.
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These are not the only cost increases: aluminium for the cans of beer has gone up, the price of cardboard has gone up and the carbon dioxide used in the production of the brewery’s beer has gone up. All told, the cost of production of a can of beer has risen by 30 per cent in the last year to what O’Donoghue said was an “unsustainable” level.
“I really don’t know what it is going to happen. It feels like everyone keeps saying: let’s wait and see what happens, let’s wait and see. Yet the prices keeping going up,” he added.
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Loyal customers
The brewery employs 25 people, including about five part-time staff. O’Donoghue is refusing to countenance shutting down either the brewery and the adjoining pizza restaurant.
“For us, ceasing production is like giving up. I don’t want to give up. We have a really good business here and we have loyal customers,” he said.
That loyalty means O’Donoghue cannot double the price of the pint. He said he has to “look after” his customers. On the wholesale side, retailers want the brewery to agree deals now for the Christmas market. This, he said, was an impossibility given the volatility.
“I cannot tell you what our costs are going to be next week, never mind in December,” he said.
O’Donoghue understands the pressure on his suppliers and feels Government action is required to stem the increases in energy prices to take the heat off all businesses.
He feels that Rascals and other businesses are “stuck in the middle”.
“Our suppliers are other small Irish companies: they come to us with their tails between their legs saying: ‘I’m sorry – our production costs have gone up; we have to increase prices,” he said. “I don’t want to give up on this. We will keep doing what we are doing, but I do feel that the Government has to step in and put a cap on the increases.”
