Pint price rise deferred because of smoke ban

Beer drinkers are set to benefit financially from the implementation of the ban on smoking in the workplace with the news that Guinness UDV Ireland has deferred a six cent per pint increase on its draught beer products.

The firm has decided to postpone the increase by three months, to June, amid concerns that the smoking ban will seriously damage beer sales in pubs and hotels. The company had planned to increase the price from March 1st, but yesterday decided to postpone the move following news from the Government that the ban on smoking in the workplace will come into effect from March 29th.

The firm's director of corporate affairs, Mr Joe Barry, said while it was hopeful the postponement might partially offset the effects of the smoking ban it was impossible to tell how effective it might be. Mr Barry said there had already been an 8 per cent decline in beer sales in the last six months. "A lot of it has to do with lifestyle issues, people are simply doing different things with their disposable income. A lot of people also have bigger mortgages and credit card debt," he said.

Guinness UDV Ireland is the trading arm of Diageo Ireland. It produces Guinness, Smithwicks, Budweiser, Carlsberg and Harp. Pints of all brands will be increased by an average of six cent wholesale on June 1st when the company will increase the price of kegs of beer by €5.45. However, publicans are expected to further add to that increase.

On Thursday Diageo Ireland reported net sales for the second half of 2003 were down 5 per cent at €515 million. Operating profits, after restructuring costs of €16 million, were down 17 per cent at €107 million.