Brewer Diageo announced it is putting up a pint of draught by 5.2% following a 4.2% hike last year. Experts now say the firm seems determined to reach the hefty price
Guinness seems ‘hell bent’ on becoming Britain’s first £10 pint, pub bosses say.
Brewer Diageo has announced it is putting up the price of draught Guinness by 5.2%. It follows a 4.2% hike last year.
At the Dog & Partridge in Yateley, Hants, the price of a pint has gone up from £5.50-a-pint to £6.50 in three years. Managing director Mark Edgell told the Morning Advertiser trade magazine: “Diageo seem hell bent on having the first £10 pint of beer. Pubs are being forced to add huge increases to the price of a pint beyond what the public will find acceptable.
“With rising energy costs, two recent rounds of national minimum and living wage increases, rises in National Insurance contributions and lowering of NI thresholds, beer duty increases and high VAT rates, along with a recent business rates valuation increase of 74% here at the Dog & Partridge, this price hike from Diageo is just another slap in the face.
“I enjoy a Guinness myself. It’s my beer of choice. But I will be exercising my choice to drink something else and I’m sure others will too.
“It is sad to see them penalise the consumers of their flagship product – the very product that has given them great sales growth from a growing and loyal following.”
Rob Barr, owner of Barr & Barr Hospitality which owns three pubs in West Sussex and Dorset, said he was surprised by the ‘extreme price hike’.
He said: “This is moving their products into unaffordable price bracket very soon. Operators will have to pass this increase on. How is this supporting their loyal customers?”
Diageo said the company had kept price rises to a minimum. The increase would allow it to keep investing in its brands and supporting its hospitality customers.
In November we told how Guinness and rival stout Murphy’s were locked in ale-out war with many pubs ditching ‘the G’ as too expensive. Landlords trying to bring punters the cheapest pint are being lured away from the iconic Dublin drink by Murphy’s which they can buy and sell cheaper.
One insider at a major pub company said: “Guinness is incredibly expensive and you’ve got nowhere to turn in a negotiation.”
A senior industry executive said Guinness may be Instagrammable with young revellers desperate to post pictures online of them alongside a pint.
But many had actually started drinking Murphy’s to save cash.
Guinness was the ‘lowest percentage margin product in most pubs’, the exec added. The average UK price per pint of Guinness was then £5.13, according to industry data, with some London pubs charging nearly £8.
Pubs were paying about a fifth less – £130 to £135 – for an 88-pint keg of Murphy’s than for Guinness which costs £150 to £155.
James Nye, managing director of Anglian Country Inns, said he had switched some of his pubs to Murphy’s which is owned by Heineken. He said Guinness has ‘an amazing brand’ that is ‘phenomenal for marketing’ but ‘the way they treat their customers I don’t blame’ pubs for switching.
“It’s Guinness who have been putting price increase after price increase through,” he said then.
“I wouldn’t say Heineken are undercutting Guinness. I would say Guinness are outpricing themselves.”
Murphy’s Brewery was founded in 1856 and became one of Ireland’s biggest brewers before Heineken bought it in 1983. The number of boozers stocking Murphy’s Irish Stout has surged in the past year to 1,500, according to Heineken data.
Phil Thorley, owner of Thorley Taverns, which runs 18 pubs, said he would charge less for Murphy’s.
“We’re at about £6.50 for a pint of Guinness. I might sell Murphy’s at £6,” he said.
“Heineken have done a me too’ product with Murphy’s. It’s a very good product but it’s not Guinness. The least amount of retail profit I get is off Guinness. But if I take it out I could lose customers.”
Heineken began its charm offensive during a national shortage of Guinness last year caused by a combination of higher demand and supply chain disruptions leaving pub bosses to look for alternatives. Will Rice, Heineken’s sales director, said: “Hundreds of new pubs began stocking Murphy’s.” It still faces a battle to overhaul Guinness which is one in every nine pints poured in the UK.
Guinness is the only beer sold by Diageo – the FTSE 100 drinks group whose main business is spirits such as Johnnie Walker, Smirnoff and Gordon’s. Bosses have claimed its recent success is due to a new-found appeal among younger drinkers, especially women. The boom has proved to be a silver lining for Diageo at a time when its spirits sales have flagged and the firm’s share price has fallen by more than a quarter in the past year.
Diageo said Guinness was ‘very competitively’ priced at 8% less than the average world premium lager.
For the latest breaking news and stories from across the globe from the Daily Star, sign up for our newsletters.