A MAJOR brewer will hike the price of its draught beer by an average of 2.97% for pubs from next month in a blow to drinkers.
Heineken said the changes will come into force on all deliveries from February 1, 2025.
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The increase in the wholesale cost of beer could be passed on to customers if pubs cannot absorb the additional costs themselves.
It is up to individual pubs and chains to decide how much they will increase their prices.
Heineken will also increase the cost of its wholesale packaged products by an average of 2.5%.
The brewery giant said it has made “considerable efforts” across the business to “deliver cost savings and drive efficiencies in 2024.
This was an attempt to try to “reduce the impact of inflation” for its customers.
But Heineken said changes to Government legislation that are set to come into force this year will cause “significant cost increases” for the company.
The news comes as pub chains are already struggling with higher costs.
Young’s said it will take an £11million annual hit from rises in employer taxes which were announced in the Budget.
Its chief executive, Simon Dodd, said in November that the increase in employer national insurance contributions and the increase in the national minimum wage would cause “significant increased costs for our industry in the near term”.
Meanwhile, Marston’s raised the price of draught beer across its pubs after the budget tax hikes.
In some areas, drinkers faced price increases of up to 10p per pint.
Heineken has said it will also reduce the strength of its SOL brand drinks from 4.2% to 3.4%.
The brewer said the reformulated beer will be in production from February 25 and its price will be cut from this date.
The decision comes after Heineken reduced the ABV of its top-selling John Smith’s Extra Smooth from 3.6% ABV to 3.4% last year.
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It also announced a rise of 1.73 per cent in the wholesale price of all its keg beers.
A Heineken spokesperson said: “As ever, we continue to make considerable effort across the business to deliver cost savings and drive efficiencies to keep price increases to a minimum, and reduce the impact of inflation on our customers.
“This year, there will be major legislative changes around Extended Producer Responsibility (EPR).
“The first stage of this is Packaging Recovery Notes (PRN) which increase Heineken UK’s responsibility for the fees from 37% to 100% – a considerable cost increase. The retail element of this has been included in the price increase.”
A Packaging Recovery Note (PRN) is a document that proves packaging materials such as glass and aluminium have been recycled or recovered.
Heineken must comply with these rules because it produces packaged goods.
But changes to regulation will mean that Heineken will be responsible for 100% of these fees.
Previously the company was responsible for 37% of these fees, with the rest being spread through the supply chain and retailer.
TROUBLE FOR BREWERIES
Heineken is not the only brewery to face rising costs and weak consumer spending.
Diageo was forced to shut the Chase Distillery in Hereford, west England, this month.
The site was known for its production of Chase-branded vodka and gin spirits.
Diageo announced it would close the Chase Distillery in June last year, in accounts filed to Companies House.
The accounts also reported a pre-tax loss of £3.2million, down from around £3.4million the previous year.
In November, craft brewer ORA Brewing said it would close its taproom in Tottenham, London.
The Carlsberg Marston’s Brewing Company (CMBC) also closed its Wolverhampton’s Banks’s Brewery late last year.
Elsewhere, Cellar Head Brewing Company and Tap Room fell into administration after attempts to find a buyer for the business failed.
Even pub giant Greene King, which owns 1,600 locations across the country, was forced to shut its 200-year-old Bury St. Edmunds brewery.
What was announced in the Budget?
IN the budget the government made several big changes which will impact pubs and restaurants.
It increased the rate of employer Class 1 National Insurance contribution rates from 13.8% to 15.0%.
It also reduced the per-employee threshold at which employers become liable to pay National Insurance from April 6, 2025 from £9,100 to £5,000 a year.
Meanwhile, it increased the National Living Wage from £11.44 to £12.21 an hour from April 2025.
All of these changes will increase the cost for pubs, which they may be forced to pass on to customers.
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