E-Malt.com News article: 2703

Ireland: The price of a pint in Ireland is set to rise next week. The increase, signaled at the beginning of this year by Diageo, equates to an average rise of €0.15 on a pint of Guiness, Smithwicks, Harp, Carlsberg and Budweiser. From June 1 2004 Diageo will put €0.06 on the wholesale price of its brands. Publicans will have to pay an extra €5.45, a rise of 4.5%, for a keg. It is widely assumed that publicans will increase their prices in line with the wholesale price rise.

Diageo announced the price rise in March, but chose to defer it until 1 June because of the implementation of the smoking ban. The increase is set to leave the cost of a pint heading close to the euro5 mark (£3.35) mark, and could be in place as early as next week.

Tourism Minister John O’Donoghue led political criticism of the plan, calling on the drinks sector to consider the potentially negative impact of the move. The minister said it was clear that Ireland had a competitiveness issue around the cost of drink and eating out – a factor that had been borne in visitor-attitude surveys and in a recent major review of Irish tourism policy completed by his department. He added: “I would call upon both brewers and the licensed trade to seriously consider the potential negative impacts of proceeding with drink price increases which can only exacerbate our existing competitive disadvantage in this area. “This sort of behaviour can only go so far before it begins to have possibly long-term negative consequences. “It may also once again raise the issue of the adequacy of competition in the drinks industry.”

Diageo said its prices would have gone up earlier this year, but were held back because of the smoking prohibition, implemented by the Irish Government on health grounds. Bar owners have been hit since the no-smoking rule was introduced by the cost of creating outdoor smoking areas, where possible, as well as the loss in a lot of cases of regular customers. The Consumers’ Association of Ireland reacted swiftly by demanding that publicans should swallow the price rise. The organisation claimed landlords would be punished by their customers if they upped drink prices.

Spokesman Dermot Jewell said: “I think sales will drop – there is no doubt about that if that level of price increase goes through.” Spokesman Phil Hogan said the party would survey the price of a pint of Guinness in 20 Dublin pubs on Friday and again seven days later. He declared: “Consumers are already struggling with massive prices on the high street, and for many state services. “Diageo is a highly profitable multinational business which already makes a huge margin from Irish customers, and I see no justification for such a stiff hike in its wholesale price. “The company should seriously reconsider its decision.”

The Irish Labour party accused the Dublin government of permitting the “ugly spectre” of a euro five (£3.35) pint of beer to become a reality.

Consumer Affairs spokesman Kathleen Lynch said the government’s failure to introduce price control measures to the drinks trade had resulted in the price rise. She commented “The ugly spectre of the euro five pint is now a reality. The decision of major brewer Diageo to increase their prices means that publicans will follow suit. “The average price of a pint in Dublin will now move towards the euro five mark, with the rest of the country bound to catch up in due course. “This will surely have a detrimental effect on tourism as Ireland’s reputation as one of Europe’s most expensive countries is further reinforced.”


31 May, 2004