E-Malt.com News article: Jamaica: Red Stripe beers increase prices

Beer maker Red Stripe has increased prices on its brews by $7 ($8.20 with consumption tax) to distributors of its pro-ducts, but says those who imbibe should pay no more than an additional $10 at the cash counters of bars or supermarkets, The Gleaner reported on May, 27.

The increases include all Red Stripe beers and Smirnoff Ice.

Red Stripe Managing Director Mark McKenzie said while his company cannot dictate the shelf price of its products, it nevertheless felt that a $10 increase would be sufficient for them to "recover cost and maintain their margins."

"Red Stripe's recommendations in relation to prices impose no obligations on customers to resell at the recommended prices," McKenzie said.

"The customer is at liberty to make whatever price adjustments they deem necessary in order to remain competitive."

The new prices, which took effect May 26, add 9.5 per cent more on average to the company's portfolio of brewed products, whose old price of Red Stripe lager was about $67.24, excluding GCT and deposit.

The company has cited the increase in the special consumption tax for the increase, but like competitor J. Wray and Nephew Limited has opted not to increase prices on the spirit brands it distributes on behalf of parent Diageo.

A single rate of 25 per cent SCT was placed on beer and spirits, except white overproof rum.

"Red Stripe/Diageo determines its pricing policy based on a number of key principles, including a consumer-based approach, relativity of current price to the competition, both for our customers and consumers, among others," McKenzie said.

Up to a year or more ago, Lascelles, a sister company to Wray and Nephew, was distributor for Diageo spirits brands, but the business was taken over by Red Stripe.

J. Wray and Nephew, purveyor of the Appleton and Wray & Nephew brands, praised the new 25 per cent flat rate on beers and spirits, saying the new regime replaced "a lop-sided structure that had historically accommodated incentive and concession programmes for certain alcoholic beverage producers."

The new rate took effect May 11.


27 May, 2009