Price rise puts squeeze on bars

Brian Blake, group managing director of DB Breweries. Photo / Richard Robinson

The price of beer is set to go up again, and one bar owner says the increase is a kick in the guts for already struggling bars and restaurants.

DB Breweries announced yesterday that its packaged beer and cider would go up in price by 3 per cent on average from March 5, with tap beer rising 1 per cent. The brewery's beer brands include Tui, Monteiths and Heineken.

DB's ready-to-drink brands will go up by an average 4 per cent.

Lion Nathan would not rule out a similar price increase yesterday, although Independent Liquor chief executive Julian Davidson said they had no plans to increase prices.

Hospitality Association chief Bruce Robertson said members would be advised to pass on the increases to patrons as soon as possible.

"Businesses are currently struggling in terms of profitability, we're seeing ongoing closures.

"And while it's challenging for them to pass it on, while they don't they're putting their businesses in jeopardy ... and putting at risk the jobs of their staff."

Luke Dallow, owner of Auckland's Red Hummingbird and Chapel Bar & Bistro, heard of the increase only when the Herald contacted him yesterday.

"I haven't even been told myself as an operator ... it would have been nice [to know] before it hit the media."

Mr Dallow did not know whether he would wait to review pricing until after an increase in alcohol excise tax in July, or look to recoup costs elsewhere.

He said DB put its prices up by about 4 per cent last year, and was disappointed the brewery would not negotiate with its customers.

"You think it is a partnership, and it would be nice to discuss these things before getting a 'Happy New Year, 2012 - here's a price increase'.

"They keep putting the price of beer up ... we'll be up to $13 a glass shortly. At the moment for a pint of beer it's over the $10 mark."

While the increases weren't huge, they would cut into margins that were already dangerously tight, he said.

"It comes straight off our bottom line. We put our prices up twice last year, and we don't want to put it up again ... or we're not going to be here. But we can't keep absorbing costs."

DB's managing director, Brian Blake, said higher raw material prices and the increased cost of packaging and distribution led to the "unavoidable" price rise.

"We've tried to limit the price increase to a lowest possible increase that we can put through ... the simple fact is that we can't carry on incurring those costs."

COST OF A DRINK

DB Breweries price increases:

$10.60
$10.50 handle of beer

$24.70
$24 pack of 12 330ml bottles