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Brewer calls on public – and government – to support pub trade amid warning average price of a pint cold top £7 in some cities

Jim Rowan at Dunns

ONE of the UK’s fastest-growing beer brands has warned the average price of a pint could exceed £7 ‘as the norm’ in some cities. 

Alan Mahon, founder and CEO of purpose-driven UK brewer Brewgooder, said spiralling production costs driven by the conflict in Ukraine, currency and duty challenges, and soaring inflation had created a ‘perfect storm’ for the industry – made worse by the scrapping of a freeze on alcohol duty announced by Chancellor Jeremy Hunt earlier this month. 

Mahon explained how the price of raw ingredients including wheat and barley are rising well in excess of the rate of inflation, adding other key ‘unseen’ materials – such as energy and gas – have hit eye-watering levels, with carbon dioxide now costing 3,000% more than it did this time last year. 

Despite these significant headwinds, Mahon said that Glasgow-based Brewgooder, whose customers include Morrisons, Asda, and the Coop, as well as on-trade customer such as the Gleneagles Hotel, would be continuing to honour all of its ongoing commitments to supporting good causes, with almost £100,000 set to be donated to its charity partners in 2022. Impact made will include support for food bank initiatives based in the UK, and the funding of clean water projects in multiple countries worldwide via impact partner Charity Water.

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As inflation and instability and rising energy prices put the squeeze on people’s pay packets, Mahon said the pub and brewing industry could find conditions tougher than during the Covid-19 lockdowns unless the public show their support for the trade in the coming months – as well as the government.  

Mahon, who has grown certified B-Corp Brewgooder into one of the UK’s leading purpose-driven beer companies, believes the industry has a role to play too, and must elevate the hospitality experience into something consumers cannot recreate at home as the UK faces the ‘massive opportunity’ presented by the winter World Cup and return of a Covid restriction-free festive period.  

He said: “I used to think ‘perfect storm’ was a cliche until we found ourselves slap bang in the middle of what the industry is facing right now. It is perhaps a greater long-term challenge than that created by rolling Covid lockdowns. 

“On the brewery side, raw material prices for the likes of wheat and barley are rising faster than the average rate of inflation, and consumers can perhaps understand that. What is less visible but equally as important is the things that don’t often come to drinkers mind when they think of what goes into beer – such as the eye-watering explosion in carbon dioxide prices which is 3000% higher than 12 months ago, on top of soaring energy prices, a pain everyone is feeling right now.

“From what we are seeing, the pressures on the industry with cost price inflation challenges and the Chancellor’s scrapping of the alcohol duty freeze might make a £7 pint the norm rather than the exception in many places – particularly in bigger cities. This is bound to make a pint a relative luxury for a lot of people, something we should all be concerned about and force us all to take stock of the challenges facing the beer industry.

“Footfall to the on-trade has definitely been one of the biggest challenges facing the industry, with consumers having to make difficult choices on where to spend their money.  A potential bright spot for the industry might be the winter World Cup rolling into the Christmas season providing a double shot in the arm for venues.

“It is therefore vital the industry and brewers continue to work hard on ensuring that the pub environment is something that cannot simply be re-created at home – whether that be through beers only available in the pub, or in encouraging people to socialise and meet friends for a drink/something to eat through various marketing or promotional platforms.

“The beer and pub trade is a resilient industry, one that’s full of passionate people who will dig deep during the challenges to come. It’s important for the public and the government to recognise their efforts with support in the coming few months.” 

Jim Rowan, managing director at wholesaler Dunns Food and Drinks, which serves more than 4,000 hospitality customers across Scotland, said brewers’ production costs had already seen prices hiked twice this year, and predicted a further rise of at least 50p a pint before the end of the year. 

He said: “Prices across the UK’s cities will always vary depending on the cost of rates, rent, free hold, wage inflation, min wages , staff shortages , heat and lights etc. These have all impacted on the price.

“However, prices from brewers have gone up twice this year so on average we expect a print of lager to go up by as much as 50p per pint. Premium beer by more. 

“Pubs etc have been passing these increases on to the public and, so far, the consumer has been understanding. Like all products there is a glass ceiling which generally you can’t go through. It used to be £5 per pint, now it’s £6. £7 per pint in some cities is now in sight.” 

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