Trade Talk: Colin Pedrick
Last week The Publican published an investigation into off-trade pricing, which highlighted the amazing discrepancy between on and off-trade pricing (eight pints or 48 cans for £20), as well as customers' preference for pub atmosphere over cheap prices. Here Colin Pedrick, managing director for on-trade sales at Interbrew UK, gives his response:
The views expressed by consumers on price and the price differential between on-trade and take-home not being a major factor aren't at all surprising as they back up the findings of our own research, which shows that consumers are willing to pay more for the on-trade experience if the product quality is right.
The fact is that take-home pricing is driven by the cut-throat competition in multiple grocers where the major retailers are using competitive prices on beer to drive footfall, especially at key sales periods such as Christmas and the summer.
Interbrew UK certainly does not want to see this deflationary spiral happening, we don't like to see beer treated as a commodity in the take-home market, and we are taking steps to put value back in to the beer category. The Publican article fuels the perception that Stella Artois is responsible for the pricing erosion in supermarkets.
Unfortunately, Stella Artois' status as market leader makes it a first choice for grocery retailers seeking to draw in customers through price deals. But, in fact, our brands command the highest average retail value price per litre among all the major brewers in multiple grocers. As we stand at the moment, Stella Artois in take-home this year is 20 per cent higher than last year on a pence-per-ml basis, commanding a nine per cent premium over Grolsch and Kronenbourg 1664, and a 20 per cent premium over Carlsberg Export.
We are also taking action to restore category value through moving prices forward in the take-home market across our branded portfolio, including the brand leaders Stella Artois and Tennent's Lager, from the end of January.
It is worth remembering that the gap between take-home and on-trade pricing is much bigger in many European countries and drinkers there realise this reflects the quality of the bar experience.
As your vox pop research shows, consumers do place an unquantifiable value on the whole pub experience. Ultimately, the challenge for on-trade retailers is to ensure that consumers have a good reason for leaving their home to do their drinking in the pub.
Finally, on the issue of binge-drinking, the solution doesn't lie in pointing the finger and apportioning "blame". What is needed is for everyone involved in the alcohol industry - suppliers, industry bodies and licensees in both the on-trade and the off-trade - to work together to communicate and promote the sensible and responsible drinking message.
Related articles:
How low can they go? (24 November 2004)
