Farmers protest prices while Guinness sales grow

Barley growers led by the Irish Farmers Association gathered outside the Guinness brewery last month to protest against the price offered for their crop this year. The 300 protesters handed out free cans of the black stuff, to emphasise the fact that each can represents no more than around one cent in earnings for them.

In a report by The Irish Times, Pádraig Walshe, president of the IFA, said that 95% of the growers’ malt is purchased by Guinness, although the company argues that it buys its grain from maltsters, Greencore Malt, rather than from farmers.
“The price on offer to growers of E165 a tonne is jeopardising future supplies. Given the scale of the increase in their input costs, growers must maintain a margin or they will not produce a crop. If Guinness want to keep the Irish harp on the pint of stout, they will have to pay a realistic price to Irish malting barley growers,” said Walshe.

The farmers are calling for the same price of E205 per tonne that they received last year, and have asked Diageo to engage in “meaningful negotiations” on the price for this season’s malting barley. The IFA have said in a statement at the end of last month that “further action will be taken” by the barley growers if the drinks company refuses to intervene.

Diageo has consistently denied that it has any control over the prices paid to farmers by the malting companies it buys from, and that it has no role in any such negotiations. The IFA says, on the other hand, that during the mid-nineties Guinness was involved in face-to-face negotiations with growers and that up to two years ago, it still had a role through the Irish Brewers Association. Walshe said it is time for the company to resume that role in the interest of Irish growers, many of whom “will find themselves re-assessing their plans for next year because of negative returns from lower prices and increased costs.”

Meanwhile, Guinness has reported 2.3% growth in the Irish market, which was driven in part by a 3% increase in draught wholesale prices. A spokesperson for the brand said that it attributes the turn around in the Irish market to the success of its recent “Alive inside” campaign, which it believes has strengthened brand loyalty. Guinness sales internationally grew by 6%, with particularly strong growth seen in Nigeria, Ghana and Cameroon. Guinness has said that it is planning a further 2% increase on wholesale prices in Ireland before the end of the year, on account of increased input costs.