S&N reveals 3.9% on-trade price hike

Scottish & Newcastle UK is to raise wholesale beer prices to on-trade customers by an average 3.9% from next month.

The company, whose brands include Foster's and Kronenbourg, has promised the £9.50 per barrel rise will be the only trade rise in 2007.

The new prices work out to an almost 4p per pint increase, but with VAT and licensees' own rising costs to take into account drinkers could end up paying up to 10p extra across the bar.

S&N defended the rise by pointing to dramatic increases in its own costs incurred over the year. "While we have absorbed as much of this as possible it has been necessary to increase our prices," said on-trade sales managing director Willie Crawshay.

"Last year I challenged other producers to keep their price increases to RPI or below, and unlike others and for the third consecutive year S&N will keep increases on beer and cider to the prevailing RPI rate of 3.9%," he said.

"We will apply our increase to the duty-exclusive element of our price, thus further minimising the impact on trade customers.

"Despite my plea last year we are still seeing certain producers deceiving their customers and consumers by quoting the lower duty-exclusive figure, or allowing it to be quoted on their behalf," he added.

Federation of Licensed Victuallers chief executive Tony Payne predicted hosts would be forced hike bar prices up by between 8p and 10p to protect their margins. "Wage increases and steep rises in utility charges, plus other costs are hitting pub businesses hard," he warned.

S&N's increase takes effect from 5 March.