Irish publicans under pressure as Diageo ups pint prices

Diageo, parent company of Guinness, has announced that it will increase the price of its draught products starting next month, prompting criticism from the Vintners’ Federation of Ireland (VFI).

The price of a pint of Guinness is set to rise €0.7c, while the price of a pint of Guinness 0.0 is set to rise by €0.10, effective Monday, February 2.

According to RTÉ News, it is estimated that a €0.7c increase would translate to a €0.20c rise in prices "at the pump," when VAT is included.

In its correspondence to publicans, Diageo said: "Industry-wide cost pressures remain elevated for businesses, and in order for Diageo to maintain sustainable operations in Ireland, we have advised our on-trade customers that there will be an increase to the list prices on our full draught product range."

Diageo added that it remains “committed to support your business and the wider hospitality sector in Ireland, and value your continued partnership."

Responding, the Vintners’ Federation of Ireland (VFI) has warned that the price increase will pile yet more pressure on pubs already struggling to survive.

"Drink costs are the single biggest cost facing all publicans, and this latest increase comes at a time when margins are already being eroded by rising labour costs, high energy prices, and ongoing inflation across all areas of the business," the VFI said on January 13.

"For many pubs, there is simply no capacity left to absorb further supplier increases."

Pat Crotty, CEO of the VFI, said: “Publicans are being hit from all sides, but drink costs are the biggest burden they face.

"This latest price increase from Diageo will put even more pressure on pubs that are already operating on extremely tight margins.

"Many will be left with no option but to pass this on to customers, which helps nobody.”

Crotty continued: “Our members understand that suppliers also face rising costs, but there comes a point where pubs simply cannot keep carrying these increases alone.

"Pubs are at the heart of local communities, and suppliers depend on them for their route to market.

"We expect suppliers, including Diageo, to recognise that reality and to support VFI members rather than repeatedly adding to their cost base.”

The VFI warned that "repeated supplier price increases are contributing to rural pub closures, where pubs are already under severe pressure from declining footfall and rising operating costs."

Crotty said: “This isn’t just about the price of a pint. It’s about the long-term viability of pubs across the country.

"Community pubs are being pushed to the brink, and continued increases in drink prices only accelerate that trend.”

The VFI is once again calling on both suppliers and the Irish Government to recognize the scale of the challenge facing the sector.

In particular, the VFI is urging the Government to introduce targeted supports to help pubs remain viable, including an excise rebate scheme for draught beer and cider sold in pubs, as well as measures to ease rising labour costs, including employer PRSI supports.

Crotty concluded: “Publicans cannot continue to absorb these hits year after year. If suppliers value the role pubs play in Irish life, now is the time to show it through meaningful support.

"Without action, more pubs will close, and once they’re gone, they’re gone for good."