Diageo's plans to raise price of draught beer 'another blow to the pub trade'
Diageo already added 12 cent to the cost of a pint in February of this year.
CORK publicans have labelled Diageo’s decision to increase the price it charges for draught beer for the second time this year as "another blow to the pub trade".
The cost of a pint is scheduled to rise by 4 cent from Monday, August 14.
The increase will apply right across the company's portfolio of draught brands which include Guinness, Carlsberg, Smithwicks, Harp, Rockshore and Hop House 13. Diageo already added 12 cent to the cost of a pint in February of this year.
“It is very disappointing and frustrating news because they already increased their prices by 12 cent plus Vat back in February. To have two increases in a six-month period is unprecedented and just incomprehensible," Michael O’Donovan, chair of the Cork city and county Vintner’s Federation of Ireland (VFI) said.
Mr O’Donovan, who is the owner of the Castle Inn on South Main Street, has called on Diageo to reverse their decision.
“We would be hoping even at this late stage that they might row back on their decision because it is another blow to the pub trade. There is a never a wrong time to make the right decision.
“They are citing increased business costs," added Mr O'Donovan. "We all have increased business costs, but we are trying to keep our businesses afloat. Some of our members are now right in their peak tourist season and they must try and make some money to see them through the winter months. Even for those that wouldn’t be running pubs in tourist areas, their locals have seen mortgage increases in the last few months and the cost-of-living crisis. General spend is way down."
It will be up to each individual publican what they do in their own premises, said Mr O’Donovan.
“By law as a trade organisation we can’t tell them what to do. They all must make their own decision. The general rule of thumb is that this is a 4 cent per pint increase plus Vat, which will be near the 10 cent price increase.
He is worried that the latest price increase will increase the competition they face from the living room and kitchen."
“We used to be in competition with the pub both down and up the road, but the biggest competition we face now is the living room and the kitchen because people are staying at home and going to their local supermarket," added Mr O'Donovan.
"The choice is huge. The biggest job we have is to try and get them out.”
Ernest Cantillon, owner of Sober Lane and Electric, also expressed his disappointment at the news.
“This is the second Diageo increase this year and it is disappointing. I don’t think the price increase will put people off, but for us we have a trade-off, do we put up our prices and pass it on or do we become loss making? Neither is attractive.”
Mr Cantillon warned of a "perfect storm" coming for publicans in Cork.
“We have an increase to the minimum wage coming down the tracks and we have the 9% Vat rate under threat again. Energy costs have stablised a bit but that is only because we are not using them during the summer. It is just a bit of a perfect storm.
“It is all these little things adding up and it is just increasingly becoming a very challenging environment. We love what we do, but it needs to be sustainable,” he added.
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