Don’t say we didn’t warn you. About this time yesterday, Stella brewer AB InBev announced it was hiking wholesale prices by just short of 8% in response to continued upward pressure on costs.
“In the past we have worked to absorb cost increases through efficiencies,” said boss Stuart MacFarlane.
“But with significant commodity price increases this approach is no longer sustainable. This is the smallest increase we are able to deliver and maintain our business on a sustainable footing.”
It’s a familiar refrain from suppliers. But yesterday’s news should have been extra familiar, as The Grocer warned in January that the price of beer was set to “rocket” in the coming months. And last month we reported that beer prices were up 9.5% in the year to July, prompting MacFarlane to call on the government to help “a market that is already in decline”.
At least the dreaded duty escalator, the subject of a fresh attack from MacFarlane yesterday, won’t be his problem for much longer, as he prepares to take over the brewer’s Central European business.
Meanwhile, AB InBev has already moved to take advantage of changes in the duty regime, effective from the first of the month, designed to promote lower-alcohol beer. The brewer last month launched lower-abv versions of Labatt’s and Rolling Rock, echoing a similar change by the Carlsberg-owned Skol.
You can read more about the shift towards low-alcohol beer this weekend in the upcoming nine-page Focus On Alcoholic Drinks.
At this rate Stella 4 might be Stella 2.8 before too long.