Enterprise price freeze to cost £700K a month

Enterprise Inns is to freeze the price on five beer products for four months while increasing the price of the rest of its drinks portfolio by 6%.

Foster's, Stella Artois, John Smiths Extra Smooth, Boddingtons and Becks Vier remain unchanged in price terms until at least 4 July this year, which will cost the company £700,000 a month.

Price rises apply on products bought from 16 February. Enterprise has insisted the group is doing all it can to absorb inflation. Enterprise is spending £1.4m a month in rent and beer discount concessions to licensees.

Last month, Enterprise boss Ted Tuppen told analysts the company would attempt to do something on increases that would "put a smile on licensees faces". The partial freeze on prices follows moves by Marston's, Robinson's, Charles Wells and Adnams to absorb prices to shelter tenants.

The price freeze by Enterprise applies to certain beer products supplied by Scottish & Newcastle and Inbev.

Fair price review​

Simon Townsend, Enterprise chief operating officer, said: "As a key part of its review of wholesale prices, Enterprise has implemented a price freeze on five major draught beers and lagers, which will hold the net prices that Enterprise retailers pay for these brands at current levels until at least 4th July 2009.

"Our aim has been to create a fair price review, which reflects wholesale price movements that have taken place over the last 12 months, whilst offering Enterprise retailers a clear advantage to help them drive footfall and protect retail profitability.

"Supplier price increases have been driven by exceptional cost pressures combined with a very challenging trading environment, and for some brand owners recently announced wholesale price increases come on top of those which were implemented last autumn.

"Enterprise did not pass on any of these increases last autumn, and with the exception of changes in excise duty, has not increased the prices of any products since February 2008. During the same period, the treasury has increased duty levels by a staggering 17%.

"New prices therefore take effect on all deliveries from Monday 16 February, however the price freeze on Fosters, John Smiths Extra Smooth, Becks Vier, Boddingtons Draughtflow and new Stella Artois 4% will last until at least Saturday 4th July 2009. "Based on the numbers of current stockists of these brands, the price freeze will benefit 93% of Enterprise Inns' pub retailers, and we are currently working with Heineken UK and InBev to provide extensive support plans to maximise the opportunity that these brands and prices offer to Enterprise Inns pubs.

"This concession will cost Enterprise, which is already spending £1.4m a month providing additional financial assistance to licensees, an additional £0.7m per month."

Furious​

Nick Griffin. boss of Brighton-based Pleisure, which runs six Enterprise pubs, said: "I'm absolutely furious. It's a kick in the teeth. Some licensees will be subsidising other licensees.

"I stock Coors products which means I'll have fellow Enterprise pubs next door which don't have a price increase. This is effectively pushing licensees down the route of particular brewers.

"In the case of Coors, the increase is above the wholesale price increase of 5.1%. I understand a major brewer is contractually obliged to increase its price by 0.9% to Enterprise in line with RPI, but this is being passed on as a 6% increase. I'm incensed by it."

Of Griffin's comments, Townsend said: "What Nick has failed to mention is that the 5.1% announced by Coors is on top of the autumn increase, which I recall was something around 3%."