Publicans unhappy as Diageo announce another price hike

Diageo will incresce its draught prices by 7 cent from 2 February

The Vintners’ Federation of Ireland (VFI) has strongly criticised Diageo’s decision to increase the price of its draught products by a further seven cent per pint (ex VAT), effective from 2 February, warning that the move will pile yet more pressure on pubs already struggling to survive.

According to the VFI, drink costs are the single biggest cost facing all publicans and this latest increase comes at a time when margins are already being eroded by rising labour costs, high energy prices and ongoing inflation across all areas of the business. For many pubs, there is simply no capacity left to absorb further supplier increases.

Diageo has blamed overall industry cost pressures for the increase. “As industry-wide cost pressures remain elevated, this increase is essential for Diageo to maintain sustainable operations in Ireland,” the drinks group said.

The brewer said it remained “committed to support your business and the wider hospitality sector in Ireland, and value your continued partnership”.

However CEO of the VFI, Pat Crotty said that publicans are being hit from all sides, but drink costs are the biggest burden they face. “This latest price increase from Diageo will put even more pressure on pubs that are already operating on extremely tight margins. Many will be left with no option but to pass this on to customers, which helps nobody.”

“Our members understand that suppliers also face rising costs, but there comes a point where pubs simply cannot keep carrying these increases alone. Pubs are at the heart of local communities and suppliers depend on them for their route to market. We expect suppliers, including Diageo, to recognise that reality and to support VFI members rather than repeatedly adding to their cost base.”

The VFI warned that repeated supplier price increases are contributing to rural pub closures, where pubs are already under severe pressure from declining footfall and rising operating costs.

“This isn’t just about the price of a pint,” says the VFI CEO, “It’s about the long-term viability of pubs across the country. Community pubs are being pushed to the brink, and continued increases in drink prices only accelerate that trend.”

Pat Crotty – CEO Vintners’ Federation of Ireland (VFI) says that price rises affect the long-term viability of pubs across the country. (Picture Conor McCabe Photography)

The VFI is once again calling on both suppliers and Government to recognise the scale of the challenge facing the sector. In particular, the Federation is urging Government to introduce targeted supports to help pubs remain viable, including an excise rebate scheme for draught beer and cider sold in pubs and new measures to ease rising labour costs, including employer PRSI supports.