The price of a pint is going to rise by about 25 cents for many people next month due to what Heineken has described as “significant increases” in the cost of energy, packaging, and raw materials.
Heineken Ireland wrote to every publican in the country on Thursday to inform them of the increase.
“Businesses in Ireland today continue to face exceptional inflationary challenges and our industry is no different,” it said. “Like you Heineken Ireland has equally faced with unprecedented cost increases across the entire supply chain.
“We have been working hard to minimise the impacts of these increases, but unfortunately have not been able to mitigate all of them.
“For this reason I am writing to you today to confirm you have to inform you of a price increase on all our draught products which will enable us to more closely reflect the cost of producing and supplying our products.
“This price increase will come into effect on all Heineken Ireland portfolio draught products on December 1st. Deliveries made on or after this date will be charged at the new price.
“Key prices for Heineken and Coors lager will increase equivalent to 17 cents per pint and the pro rata rate for all other draught brands and keg sizes.”
When VAT is added, the actual rise in cost for consumers will be about 25 cents per pint. Diageo, which brews Guinness, has been asked by The Irish Times whether it has any plans to follow suit.
Aside from Heineken, products affected by the price increase include Coors, Tiger, Birra Moretti, Murphy’s Irish Stout, Island’s Edge, Cute Hoor, Lagunitas IPA, Orchard’s Thieves Cider, Fosters, and Beamish.
Vintners Federation of Ireland chief executive Paul Clancy said most publicans will have to pass on the price increase to their customers.
“Members are extremely concerned about this price rise,” he said. “There is never a good time for such a price increase, but in the current climate where everyone is feeling the impact of soaring costs this is particularly poor timing.
“Due to the cost of doing business, most publicans will have to pass on the price increase to their customers. These price increases are the last thing publicans or their customers need right now.
“The energy crisis has resulted in many pubs having to curtail their opening times to save money while other costs such as insurance and Sky Sports are making it extremely difficult for publicans to break even.
“Pub customers are also going through their own cost of living crisis and we know our members are desperately unhappy about having to pass on this increase.”
In a statement to The Irish Times, Heineken said it was not passing on the full impact of cost rises for its Irish business, and noted the cost of malt has increased by 120 per cent, while diesel has increased by 67 per cent.
“Due to significant increases in the cost of energy, packaging, and raw materials, Heineken Ireland has been left with no choice but to amend its pricing in the Irish on-trade market,” said a spokesman.
“As a result, we have written to our on-trade customers to advise them of a 9 per cent increase in wholesale draught prices to more closely reflect the current cost of producing and supplying our products.
“Heineken is not passing on the full impact of cost rises for its Irish business. Heineken sets the wholesale price that is charged for its products but has no role in relation to the price paid by the consumer, as this is set by individual operators within the on-trade sector.”
The Dutch brewer’s latest set of company accounts show revenue rose 37 per cent to €16.4 billion in the six months to July, compared with the lockdown-marred year before.
Its operating profit hit €2.1 billion, a 20 per cent increase, which the company said was driven by “volume recovery, pricing, and revenue management actions”.
Heineken said that, compared with the pre-pandemic year of 2019, the volume of drinks sold was up 0.8 per cent, with net revenue 14 per cent higher, partially due to “inflation-led pricing”.
