Diageo raises prices for the second time this year

Tazz T · 19-07-2023 9:53pm #1

https://www.buzz.ie/news/irish-news/price-increase-pint-ireland-diageo-30501988?utm_source=buzz_ie_newsletter&utm_campaign=daily_newsletter2&utm_medium=email

Pricegouging at its finest.

Diageo annual gross profit for 2022 was $12.618B, a 21.83% increase from 2021.
Diageo annual gross profit for 2021 was $10.357B, a 15.73% increase from 2020.

Diageo said in a statement: “We continue to experience rising input costs across our business operations in Ireland. We are working to manage and absorb much of this, but to maintain a sustainable business, we have written to our customers in the on-trade to advise them of an increase on draught beer list prices of 4 cent per pint. The price change will be applied across the entire draught beer range and will take effect from 14 August.”

which is completely at odds with their statement to shareholders in their latest financial report 31 Dec 2022...

Price increases and supply productivity savings more than offset the impact of absolute cost inflation on gross margin.

The 10 euro pint will officially arrive in Temple Bar in August.

enricoh · 19-07-2023 9:58pm

4c on a pint that costs e5-6 on average. So less than 1% rise this year, think inflation is running at 5% this year. It'd be great if everything else goes up the same rate as Guinness.

Fwiw I paid E10 a 330ml long neck in a couple of bars in Milan 10-15 year ago.

Jim_Hodge · 19-07-2023 10:05pm

Well below inflation.

Geuze · 19-07-2023 10:12pm

The 4c is before the trade add their own margin.

This is the third increase since COVID ended, isn't it?

Feb 2022 = +6c, the price rose by 20c in my local pubs, from 4.40 to 4.60

Feb 2023 = +12c, the price rose by 40c in my local pubs, 4.60 to 5.00

This +4c will probably mean another 20c in the pub?

So an increase of 80c in under 18 months.

4.40 to 5.20, or an 18% increase.

Geuze · 19-07-2023 10:15pm

https://www.boards.ie/discussion/comment/120872670#Comment_120872670

The 4c is the increase in the wholesale cost. The retail price will rise by probably 20c.

TinyMuffin · 19-07-2023 10:20pm

None passed back to the farmer who grows the grain.

kippy · 19-07-2023 10:20pm

The rural pub trade is all but dead since COVID. Many places never reopened..even in small towns many pubs never reopened and nightclubs are all but dead.

The price increases since as well as general increases on costs of living have the sector struggling for survival.

While I don't condone alcohol as a great habit to have the result of pub closures and social aspects that pubs provided in rural communities are already been noticed across the board.

I am at an age where going for a few pints is a rare event as I have plenty other distractions but growing up in your twenties and thirties nowadays is expensive no doubt.

Those that are saying this is less than inflation obviously missed the part where diageo are literally making billions in profits..price gouging at its finest.

standardg60 · 19-07-2023 10:39pm

IMG-20230719-WA0000.jpg

This is the new price list, a 50l keg of Guinness equates to 2 euro a pint cost.

Who's doing the ripping off here?

The duty is paid on the keg, it doesn't increase with the retail cost.

screamer · 19-07-2023 10:51pm

https://www.boards.ie/discussion/comment/120872838#Comment_120872838

If you’re insinuating that the publicans are ripping people off, remember out of every pint there are wages/ electricity/ rates/ water charges/ rent or mortgage/ heat and wear and tear to be paid for, and what little is left out of that just might be a tiny profit. Trust me, running a pub is far more than just opening the doors at a certain time and closing them at closing time, it is a full time job to keep it all going and the returns for most pubs are small.

standardg60 · 19-07-2023 11:13pm

https://www.boards.ie/discussion/comment/120872875#Comment_120872875

I'm not insinuating anything, just pointing out the facts.

At a retail price of 6.50 per pint the profit margin is 51.95% exc vat, per pint, and that's including the price increase.

screamer · 19-07-2023 11:33pm

https://www.boards.ie/discussion/comment/120872938#Comment_120872938

And as I said take out all the running costs of keeping the doors open and your profit is cents. Pubs are not the goldmines they were of the past.

Geuze · 19-07-2023 11:45pm

https://www.boards.ie/discussion/comment/120872838#Comment_120872838

It's great to get the actual costs, thank you.

The current cost per pint of Guinness in a 50L keg is 1.96, including excise duty.

This means that Diageo are making massive profits, as beer can be produced at scale for pennies per pint.

My local pub, and many pubs in Ireland, charges 5.00.

Strip out the 23% VAT and we are at 4.065.

Here is a breakdown out of €5.00:

Diageo = 1.42

Pub = 2.105

Tax = 54c excise + 93.5c VAT = 1.475

Geuze · 19-07-2023 11:48pm

Here is a breakdown out of €6.00 in Dublin:

Diageo = 1.42

Pub = 2.92

Tax = 54c excise + 1.12c VAT = 1.66

Padre_Pio · 20-07-2023 1:06am

At the end of it, the government makes the most money. Just like a lot of products including fuel and insurance.

enricoh · 20-07-2023 8:39am

https://www.boards.ie/discussion/comment/120872875#Comment_120872875

My accountant has quite a few pubs on his books. He said he can't remember the last time a no food pub got audited by revenue.they don't bother with them anymore as they'd be chasing pennies.

Tazz T · 20-07-2023 9:38am

https://www.boards.ie/discussion/comment/120872670#Comment_120872670

This is the 'second' hike this year, the first was 12c in Feb, which translated into at least 30c at the pump, so well above inflation. This will put another 10c minimum on a pint - from a firm who has admitted it's increased its prices more than what inflationary pressures required.

And as for your comment on the place you got ripped off in Milan, I paid 3.50 a pint bottle in Crete in April, and last time in Milan 1 euro a glass of wine, so I'm not sure what point you're trying to make. Mine is that Diageo are making massive profits and have admitted that they have increased costs more than inflation to do so.

Price of a pint is not the fault of the publican these days, it's as others have said, greedy corporates, gov taxes and insurance companies ripping off businesses.

RocketRaccoon · 20-07-2023 9:40am

https://www.boards.ie/discussion/comment/120872720#Comment_120872720

€5.20 a pint is a good price now. I paid €5.50 in my local the other night, a little small town pub.

Geuze · 20-07-2023 10:56am

Prices in suburban London, in 2022, for comparison:

VAT is 20%, so 3% less than here.

Excise duty is fairly similiar.

Cheapest pint is Ruddles = 1.59, so under 2 euro, in London!!!

This just shows how the brewers are screwing us.

Carlsberg = 2.39

Guinness = 2.99, so about 3.50-3.60 euro, brewed in Dublin

Various lagers = 3.29-3.45

Geuze · 20-07-2023 10:58am

Prices in suburban London, in 2023, for comparison:

VAT is 20%, so 3% less than here.

Excise duty is fairly similiar.

Chris_5339762 · 20-07-2023 10:39pm

Agreed with the prices, but I can't imagine what kind of slimy bar does a dodgy restaurant style photo of its menu. Awful.

Beefcake82 · 20-07-2023 10:46pm

Stopped buying anything Diageo sells long ago. My wife loves Baileys but we get the aldi/lidl version, just as good. Vote with your wallets folks.

Tazz T · 21-07-2023 9:40am

https://www.boards.ie/discussion/comment/120877716#Comment_120877716

Pretty sure that'd be Wetherspoons :)

bennyineire · 21-07-2023 9:56am

https://www.boards.ie/discussion/comment/120873983#Comment_120873983

Those prices match fairly similar with Weatherspoon's in Blancherstown so you point is a bit mute, I travel to London regularly with work and I can assure you London is every bit as expensive as Dublin for a pint when you do the currency conversion

Tazz T · 21-07-2023 12:50pm

https://www.boards.ie/discussion/comment/120878637#Comment_120878637

In fairness, I have a pint of Strongbow in the Great Wood in Blanch from time to time and the price seem to go up everytime I go in. Started at 2.95 last year and is now 3.85 - still good value compared to here but would be cheaper in the UK.