Diageo blamed “significant inflation in input costs” as it announced a 12 cent increase – excluding VAT – in its draught beer list prices which it is to impose from February 1st. After tax is added, the move will add at least 15 cent to the pint.
The increase will apply across all the brewery’s brands, which, alongside Guinness, include Smithwicks, Rockshore, Harp, Hop House 13 and Carlsberg.
Following the increase, the average price of a pint of Guinness will top €5.30, according to Central Statistics Office figures - and substantially more than that in some pubs, particularly in urban settings. The average price of a pint of lager will jump from €5.57 to €5.72 on the basis of the CSO figures from November last year.
“We have absorbed these costs for as long as possible but unfortunately, we can no longer continue to do so,” Diageo said on Tuesday. “As a result, we have written to our customers in the on-trade to advise them of an increase.”
Rival Heineken announced a 17 cent a pint price rise in November, with pro rata increases in its premium brands. At that time, Diageo assured publicans that it would not increase prices before the end of 2022.
The Diageo price increase is twice the level of the rise it imposed in February last year. The CSO said in November that stout prices had jumped 21 cent in the previous 12 months while the price of a pint of lager was 26 cent more expensive.
The announcement from the Guinness brewer was greeted with dismay by publicans who said the price hike would hit particularly hard coming as it does at a very quiet period and at a time when the pub trade is struggling to come to terms with soaring energy costs, inflation and the general increase in the cost of doing business.
The Vintners’ Federation of Ireland (VFI) said that publicans would “most likely have to” pass on the latest price increase to their customers.
The VFI said its members were “extremely frustrated about the situation” as it called on Diageo to reconsider the move which comes just weeks after Heineken rolled out price increases that will add more than 20 cent to the price of a pint of its lager once the full effect is felt this spring.
“Following the increase in Heineken prices in December, this is the second big price increase our members are having to deal with in a few short weeks,” said VFI chief executive Paul Clancy.
“Publicans are getting hammered from every angle at the moment and this news from Diageo is a further blow to the trade.
“We’re heading into the quietest few months of the year for the trade so the increase in the price of a pint couldn’t come at a worse time. Due to the unprecedented cost of doing business, publicans will have to pass on this price increase to their customers, which is something they are very unhappy about.”
He pointed to energy costs that are “at all all-time high, while at the same time the trade faces losing the 9 per cent hospitality VAT rate at the end of February. The trade can’t keep taking these hits on what appears to be an almost weekly basis”.
