Struggling Eden publicans say they will try and keep their beer prices as low as possible this year – despite the price of a pint expected to rocket by as much as 70p by September.
But industry experts say the triple whammy of COVID, the cost-of-living crisis, and the war in Ukraine means dramatically raising their prices could be the only way some landlords can hope to survive.
The alternative could even mean beer and lager being considered a “loss leader” as pubs scramble to make a profit through food sales alone.
The average price of a pint has gone up by 20p in the last two years. But brewery bosses last week warned that the ongoing war in Ukraine could see it increase by as much as 70p in some parts of the country by the end of the year, due to increases in grain prices on the world markets.
This is on top of rising energy costs and inflation, which have already put a huge strain on the day-to-day running of hospitality establishments – leading to fears that it could spell disaster for the already beleaguered hospitality industry.
Last month, Marston’s – which took over the Cumbria-based Jennings Brewery in 2005 – announced it would be increasing their prices by as much a 45p a pint.
A spokesman said: “The price increase is a direct impact of the soaring energy prices and operating costs as being experienced by all businesses and households across the country.”
Joe Gregory, who runs the Cross Keys in Carleton, Penrith and the Highland Drove Inn at Great Salkeld, said he had already been forced to add between 10 and 15 pence to his beer since March.
“Our suppliers have put up their prices, but this has been compounded by the rise in cost of electricity and CO2,” he said. “It’s meant prices at our pumps have gone up by seven percent, and I suspect that’s just the start.
“I’m fully anticipating prices to go through the roof in September when the full effect of the grain price increases filters through the system. At the moment brewers are still using last year’s stocks.”
Joe, 35, took over both pubs in April last year when his plans to open a restaurant in Keswick were dashed by the Covid pandemic. And he praised his customers for their understanding in the face of the increases.
“A few eyebrows were raised, but everybody knows that the cost of living is going up so there has been a lot of sympathy for our situation. We’ve had tremendous local support through thick and thin, and we will do our best to give the best value we can – but a pub has to make a profit and I can see a time when beer becomes a loss leader and we have to rely solely on food sales.”
Hugh Price, from the Cumbria branch of CAMRA, said that while price rises were unpopular among customers, they were essential for publicans to survive.
“In Cumbria price rises of 70p to £1 a pint of beer are already needed by pub tenants who rent from a pub company and who are tied at high prices to their products,” he said.
“A typical freehouse currently needs to put maybe 20p-40p on a pint of beer or lager just to turn a profit. But of course, big brewery price increases are only part of the problem, as most other pub overheads have soared, including wages and utility bills.
“Add to that the problem of acute staff shortages and it is looking pretty grim in the hospitality trade.”
According to figures from real estate firm Altus, around 350 pubs – the equivalent of six a week – have closed for good in England and Wales since the first COVID outbreak two years ago.
