GUINNESS has confirmed it is bringing in an above-inflation price hike in a fresh blow for drinkers.
Diageo, which makes the beloved Irish stout, has increased the amount it charges pubs to buy draught Guinness products by 4.2%.
This rise is significantly higher than the reported inflation rate for January, which stood at 3%.
Drinkers can expect the rise to hit prices at the bar as pubs are already struggling with a cost increases.
The price hike will come into effect on May 1 this year – a month after operators are set to be hit by increases to employer National Insurance (NI) Contributions and the National Living Wage.
Pub bosses shared their frustration at the news with industry newspaper the Morning Advertiser.
JKS Pubs managing director Dom Jacobs said many had anticipated the increase and set out plans to put up prices.
He added: “We will limit this as much as we can, but there will be no getting around it.”
Meanwhile, Ash Corbett-Collins, chairman of the Campaign for Real Ale (CAMRA) told The Sun: “The news that Diageo is hiking draught Guinness prices by 4.2% for UK pubs highlights the grim choice that publicans are facing; having to put up prices for customers or absorbing that cost themselves, putting the survival of their own business at risk.
“Pubs, bars and taprooms are doing all they can as a means to survive as they battle against a tidal wave of issues such as high energy bills, NI increases and rising costs of goods.”
Guinness has said the price increase will affect Guinness draught in kegs, Guinness Microdraught and Guinness Surger.
However, Guinness products sold in cans and retail settings will not be impacted.
The stout giant defended the price of a pint of draught Guinness and said that with an average price of £4.62 it was 16% lower than a world premium lager.
Parent brand Diageo said: “We have today informed our on-trade customers of a cost price increase (CPI) on Guinness draught products.
“Guinness is a high-quality beer that is a significant footfall generator for hospitality, and this CPI ensures we can sustain investment levels in, and continue to grow, the Guinness brand.”
Guinness was hit by supply problems over the festive period as the maker failed to meet demand, leaving pumps running dry.
Pubs have reported continuing limits on supply. A Diageo spokesperson added: “While demand for Guinness continues to grow, we have made progress in replenishing stock levels in Great Britain so that supply has returned to more normal levels.
“We will continue to manage supply responsibly so that consumers can look forward to enjoying high-quality pints through the spring and summer.”
However, it’s not all bad news for consumers as JD Wetherspoon has confirmed it has no plans to increase prices as a result of the rise.
A spokesperson said the average price of a pint of Guinness in around 670 of its pubs is £3.60, or £3.20 on a Monday when it’s included in a promotion.
Guinness has seen a surge in popularity in recent years and in January there were reports it could be sold off for as much as £8billion as Diageo eyes cashing in.
The pub industry is facing mounting pressures, including soaring energy bills, rising costs, and squeezed household budgets.
In April they will also be hit by upcoming hikes in employer National Insurance Contributions and the National Living Wage.
Several operators have warned punters to expect price increases as a result including All Bar One owner Mitchells & Butlers and Fuller’s.
As costs increase the British Beer and Pub Association has warned that more pub closures could also be on the horizon.
The trade body estimates that the cumulative impact of the Autumn Budget will create an extra £650 million in costs for the sector.
Many pubs are also bracing for a planned reduction in the business rates discount for hospitality, leisure, and retail firms, which will drop from 75% to 40%.
Camra’s Corbett-Collins has also renewed calls for business rates reform alongside changes to help publicans stock more beers from independent brewers to support the industry.
Last month research revealed the most expensive beer brands and the areas where a visit to the pub will hit your wallet the hardest.
How to save money buying alcohol
Alcohol can be pricey if you’re planning a party or hosting an event but there are ways to cut costs.
It’s always important to drink responsibly, here, Sun Savers Editor Lana Clements share some tips on getting booze for the best price.
Stocking up can mean big savings on drinks, especially if you want to buy wine or fizz.
The big supermarkets regularly offer discounts of 25% when you buy six or more bottles of wine. The promotions typically run in the lead up to occasions such as Bank Holidays, Christmas and Easter.
If you know you are going to need booze later in the year, it can be worth acting when you see offers.
Before buying your preferred drink make sure you shop around to find the best price – you can use a comparison site such as pricerunner.com or trolley.co.uk.
Don’t forget that loyalty cards can unlock better savings so make sure you factor that in too.
If you like your plonk, wine clubs can also be a good way to save money and try new varieties. You’ll usually have to pay a membership fee in return for cheaper price so work out if you will be buying enough to make the one off cost worthwhile.
OTHER BEER NEWS
Brewers have also been impacted by escalating costs with many cutting product lines or reducing the strength of much-loved brews.
Punters were left fuming earlier when Carlsberg Marston’s Brewing Company (CMBC) announced it was ditching 11 classic cask beers.
The Campaign for Real Ale (CAMRA) slammed the decision as “another example of a globally owned business wiping out UK brewing heritage”.
A number of major beer brands have slashed the strength of their lagers in a budget-boosting move too.
Hophead has reduced its ABV from 3.8% to 3.4% with landlords still being charged the same wholesale price.
Bottles of Banks’s Amber Ale were also changed from 3.8% to 3.4% in the middle of last year.
Meanwhile, Carlsberg Danish Pilsner, Grolsch Premium Pilsner and Banks’ Amber Ale have been reduced to 3.4%.
The move from a number of beer brands come after drinks started being taxed by alcoholic strength.
The change since August means that drinks are now taxed according to strength rather than type.
What is happening to the hospitality industry?
By Laura McGuire, consumer reporter
MANY Food and drink chains have been struggling in recently as the cost of living has led to fewer people spending on eating out.
Businesses had been struggling to bounce back after the pandemic, only to be hit with soaring energy bills and inflation.
Multiple chains have been affected, resulting in big-name brands like Wetherspoons and Frankie & Benny’s closing branches.
Some chains have not survived, Byron Burger fell into administration last year, with owners saying it would result in the loss of over 200 jobs.
Pizza giant, Papa Johns is shutting down 43 of its stores soon.
Tasty, the owner of Wildwood, said it will shut sites as part of major restructuring plans.
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