Overheads lead to record beer hikes

by Tony Halstead

Beer drinkers are facing record rises in the price of a pint as hard-pressed licensees struggle to meet brewery increases and a dramatic escalation in pub running costs.

A poll conducted by the Morning Advertiser this week revealed that many hosts have been forced to slap as much as 10p on bar list prices thanks to soaring business overheads.

One trade leader claimed the increases are the highest he has ever experienced and has urged hosts to explain to customers why they are having to pay so much more.

Federation of Licensed Victu-allers Association chief executive Tony Payne said the annual round of brewery price rises had been compounded by steep increases in overheads, such as new rateable values, the minimum wage, fuel, RPI rent rises and heavy additional costs involved with the new Licensing Act.

"Running costs are set to shoot up dramatically this year but hosts have to protect their margins and increase prices to safeguard profits and ensure a decent standard of living," said Payne. "I think they have to spell out to their customers just why prices have been forced to rise so sharply because on this occasion it is not all the fault of the brewers."

The news comes as new national statistics reveal a 5.5% drop in pub alcohol sales last year, which contrasts sharply with a 9% rise in off-licences and supermarkets.

Hosts said they were resigned to losing customers as the off-trade prepared to claim another wave of disenchanted pub regulars. A number said they faced complaints from customers when the rises were first introduced.

Licensee Shaun Rennison, boss of SCR Hull, said he has been forced to impose an average 10p increase in all his three pubs. "This is the minimum required if margins are not to be eroded because we are going to be hit by an unprecedented increase in costs this year," he said. "An average of 10p is being applied by many other licensees, according to feedback through our LVA."

Freetrader Mike Stevens, of Toby's Tavern, Worcester, said he had put 5p on ale and 10p on lager. "I warned my customers in advance so it was not such a bombshell for them, but still got the usual moans," he revealed.

Jayne Hall, who runs the Ash Hotel, Stockport, Manchester, said increased costs were raining in from every angle. "Our rates have doubled and the minimum wage has come on top of the normal rises in other areas. We have had to stick an average 10p on beer and lager prices to make sure ends meet this year," she said.

Geoff Sutcliffe, host of the Rising Sun, Wilpshire, Black-burn, Lancashire, said customers had reacted badly. "They normally just shrug their shoulders and accept increases but some have been shocked by the size of the rise. People are already cutting back their drinking."

Alan Murdock, of the Farm-house Tavern, Lancaster, is an-other host forced to raise prices by 10p. "Pub prices keep going up while supermarket prices somehow manage to keep going down. We are being hit by increased costs all the time and it gets to the point where you wonder how long you can keep going on."

Paul Stone, licensee of the Navigation, Willenhall, near Wolverhampton, said there had been a very negative response from customers. "We have put 10p on beers and so far sales have just about held up, but there is a distinct hardening of attitude by customers this time round."

Preston host Graham Row-son, of the Plungington Tavern, Preston, Lancs, said he would be putting up prices in the region of 10p even though his pub was in a price-sensitive area. "I'm holding back the rise for a month but I believe certain sectors of the pub trade will soon be in a dire situation because overheads are criminal," he said.