Brewers live in ‘extraordinary times’

By Rod Addy

- Published: 01 September, 2008

Brewers face being crippled by soaring input costs, Coors Brewers warned as it took the drastic step of announcing a 3p per pint increase across on- and off-trades from September 29.

Coors pointed out that the Producer Price Index – which measures the price changes of resources exchanged between manufacturers – has tripled since February, from 8.9% to 30%.

“We are seeing input cost inflation of a magnitude that could cripple the UK beer industry,” said Coors chief executive Mark Hunter. “Input costs, such as barley, diesel, metal and energy have risen well above inflation – barley, for instance, has gone up by more than 40% in the last year. It is no longer tenable to fully absorb the rate of input cost inflation.

“We have battled hard against the current trading environment with the support of our customers and a strong brand portfolio, but the severity of inflationary pressures we have experienced since the beginning of 2008 has significantly exceeded expectations.

“These are extraordinary times for beer. We recognise the pressures facing brewers and beer retailers alike and we will continue to work with our customers to attack costs and create beer value.”

Coors increased on-trade prices by 4p per pint in February.