Yesterday morning I met up with a group of lads who belong to our little rough shoot. It is a diversion I enjoy. Many licensees care passionately for their golf. Personally I think it odd to hit a small round ball as far away as possible, then follow it. But no doubt many feel my hobby is equally odd.
Anyhow, like an episode of The Archers played out in real life, the conversation turned to the price of corn. This year the harvest has been so poor that there is talk of corn priced around £150 per ton. But before people start tutting and saying "yeah, whatever" you must realise that, until very recently, corn was lucky to be worth £40 per ton. We are facing a four-fold increase. That is huge.
Realise also that cereals like corn and barley are in demand from bakers, brewers, distillers and many others. The scarcity of grain, a world-wide shortage, means that the cost of raw ingredients has risen dramatically. And supplies are going to be short.
Inevitably the consequence of this will be that the price of the producer's products will rise. Malted barley, a vital component of beer, is due to rise substantially in cost ~ and beer costs too will therefore rise dramatically.
There will be licensees out there full of doom and gloom, who, still reeling from the impact of the Licensing Act, the smoking ban and all the other changes heaped upon us, will simply view this as another nail in the coffin of the licensed retail trade. I don't think it need be like that.
Some good advice ~ I was told years ago to view all problems as challenges.
If there are going to be price rises in beer across the board, and if our GPs remain the same, then our earnings should also increase. That would be nice.
I would also like to think that if the price of beer increases it may help towards eliminating the deeply offensive practice of discounting where suppliers charge differing prices dependent on the type of business they are selling to. Maybe then we might be able to compete on a more even playing field.
Maybe also a price increase might go some way towards helping cut consumption by youngsters. Hopefully the off-trade will take the hit on this and the responsible on-trade will be able to enhance their offerings.
Whichever way things turn out I am confident we will see a price increase. But I don't necessarily think this will be a bad thing.