A Scottish brewery has warned the average price of a pint could exceed £7 ‘as the norm’ in some cities.
Alan Mahon, founder and chief executive of Edinburgh-based Brewgooder, said spiralling production costs driven by the conflict in Ukraine, currency and duty challenges had created a ‘perfect storm’ for the industry – made worse by the Chancellor scrapping a freeze on alcohol duty earlier this month.
He explained how the price of raw ingredients - including wheat and barley - are rising well in excess of the rate of inflation, adding other key ‘unseen’ materials - such as energy and gas - have hit eye-watering levels, with carbon dioxide now costing 3,000% more than it did this time last year.
As inflation and rising energy prices put the squeeze on people's pay packets, Mahon said the pub and brewing industry could find conditions tougher than during the Covid-19 lockdowns, unless the public show their support for the trade in the coming months – as well as the government.
He added that the industry has a role to play too, in elevating the hospitality experience into something consumers cannot recreate at home, as the UK faces the ‘massive opportunity’ presented by the winter World Cup and return of a Covid restriction-free festive period.
“I used to think ‘perfect storm’ was a cliche until we found ourselves slap bang in the middle of what the industry is facing right now. It is perhaps a greater long-term challenge than that created by rolling Covid lockdowns.
“From what we are seeing, the pressures on the industry with cost price inflation challenges and the Chancellor's scrapping of the alcohol duty freeze might make a £7 pint the norm rather than the exception in many places – particularly in bigger cities.
“This is bound to make a pint a relative luxury for a lot of people, something we should all be concerned about and force us all to take stock of the challenges facing the beer industry.”
Mahon added: “The beer and pub trade is a resilient industry, one that's full of passionate people who will dig deep during the challenges to come - it's important for the public and the government to recognise their efforts with support in the coming few months.”
Jim Rowan, managing director at wholesaler Dunns Food and Drinks, which serves more than 4,000 hospitality customers across Scotland, said brewers’ production costs had already seen prices hiked twice this year, and predicted a further rise of at least 50p a pint before the end of the year.
“Pubs have been passing these increases on to the public and, so far, the consumer has been understanding.
“Like all products there is a glass ceiling which generally you can’t go through - it used to be £5 per pint, now it’s £6 - £7 per pint in some cities is now in sight.”
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