Publicans are accused of profiteering, but they have an explanation
How does a 6 cent increase in the price of a pint by Guinness become a 30 cent increase by publicans?In March, Diageo increased the cost of its products including Guinness, Carlsberg and Smithwick’s by 6 cent. It came on the back of a 12 cent increase the drinks giant imposed on publicans last year. Photograph: Bryan O’Brien/The Irish Times
Publicans reacted angrily to the price move, with the Vintners Federation of Ireland saying the decision was “the latest hammer blow to the pub trade and underlines the need for Government to introduce further supports for a sector experiencing unprecedented costs pressures”. For its part, it blamed the increase on rising costs. “Due to continued increases in underlying costs we need to adjust our pricing on our draught products,” a Heineken Ireland spokesperson said.
“Why do they seem to think it’s acceptable to maintain profit margin from an increase in price of their raw material? In this case they have more than maintained profit margin.” Now, by way of more context, according to the Central Statistics Office, the average price of a pint of stout in licensed premises last November was €5.64, up 48 cent in the year, while lager cost €6.07, up 50 cent year on the year, but prices vary depending on the establishment.
“When the suppliers up their prices, publicans have to follow suit with increases of their own simply to cover VAT and margin. Add in the recent increase in minimum wage and the change in statutory sick pay and you have a situation where many pubs are finding it increasingly difficult to even come close to making a profit.”
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