An increase of 15 cent is expected for a pint of Guinness, making the price rise significantly

An increase of 15 cent is expected for a pint of Guinness, making the price rise significantly

Diageo announced that due to increasing expenses, they could no longer absorb the costs without any price hikes. In response, publicans expressed their dismay at the latest raise in prices.

Diageo has decided to up the prices of draught beer by 12 cents (excluding VAT) from February 1st due to the increasing cost of inputs. When tax is included, this could be as much as 15 cents more per pint.

The prices of all the brewery's products, including Guinness, Smithwicks, Rockshore, Harp, Hop House 13 and Carlsberg will be increasing in the near future.

The price of a pint of Guinness has risen significantly and the Central Statistics Office reveals that it can amount to more than €5.30 on average. In certain pubs in urban areas though, the cost can be even higher. According to the CSO data from November last year, the cost of a pint of lager has gone up from €5.57 to €5.72 on average.

Diageo stated on Tuesday that they had borne these costs for as long as they could, and were now forced to raise them. They sent out notifications to their clients in the on-trade industry informing them of this price change.

In November, Heineken raised the prices of their beers by 17 cents per pint, leading to pro rata hikes in high-end products. Diageo then reassured publicans that they would not up their prices until January of 2023.

Diageo has imposed a substantial price increase which is double the level of last year's February rise. As per their Chief Sales Officer, stout prices have soared by 21 cents in the past year whereas, a pint of lager now costs 26 cents more than what it did before.

Responding to the announcement by Guinness brewer, publicans showed their disappointment and concern and said this price increase could not have come at a worse time, as the pub trade is already facing numerous difficulties, such as rising energy prices and inflation. With the current state of affairs in the industry, this additional burden can be particularly damaging.

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According to the Vintners’ Federation of Ireland (VFI), the latest cost increase will more than likely be transferred over to customers by publicans.

The VFI has expressed its deep disappointment regarding the measure taken by Diageo, which follows close behind Heineken's own price hikes. This will result in an increase of over 20 cents per pint once its full impact takes effect in Spring. Its members have voiced their disappointment and urged Diageo to reconsider this decision.

Paul Clancy, the CEO of VFI commented on the significant Heineken price hike that occurred in December. It was the second substantial price raise customers had to tolerate in a short period.

The pub industry has been hit by countless blows over the last while and Diageo's news is yet another. This will make the situation difficult for publicans.

The factors like an increase in energy costs and the trade facing a 9 per cent hospitality VAT rate at the end of February force the trade to pass on the price hike to the customers which they are not happy about.

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