The Netherlands: Heineken price hike baffles both beer drinkers and bars and café owners

The decision by brewing giant Heineken to increase the price of beer in bars and cafes is baffling beer drinkers, according to the head of the Dutch hospitality industry association, DutchNews.nl reported on April, 4.

While cafe prices rise, supermarkets offer beer at bargain prices, Lodewijk van der Grinten said.

“Albert Heijn has a stunt price of 12 cans of Heineken for €5.94. That means a discount of 43% and a litre price of €1.50,” Van der Grinten said. “Cafes have to pay almost 2.5 times as much.”

Heineken is putting up the price of bulk beer to the hospitality industry by 5% this month, taking the price of a 50 litre barrel to €121.58. The brewer is taking advantage of small firms because they have no choice but to swallow the higher price, Van der Grinten said.

Heineken said in a statement the increase in the beer price is necessary to “continue healthy company operations”.

“We need to do this to continue investing in the hospitality sector and to develop new products,” he said. “At the same time, the cost of personnel, production and energy have gone up and need to be compensated for.”

Last year the price of a barrel of beer rose 6%, RTL news said.

In January, a new report said the Dutch competition authority should ensure beer companies can no longer stop cafe and bar owners from selling beer from their competitors.

By allowing drinkers to choose between different breweries, competition will increase and prices will come down, the report by the economic research institute SEO said.

Some 75% of the cafe beer market is tied to individual breweries because they impose exclusivity deals on cafe owners in return for loans or because they own the property or its fixtures and fittings, the report said.

05 April, 2013