Blog: On the up in 2008? Prices, that is
Olly Wehring | 3 December 2007
While the majority of you out there in the drinks world appear to have your heads down, making the moo-lah as Christmas approaches - Happy First in advent for yesterday, incidentally - a pattern for 2008 already appears to be taking shape.
Although Anheuser-Busch said last week that its full-year earnings growth remains on track, commodity cost pressures have clearly made their presence felt at the brewer this year.
This was followed later in the week by Asahi Breweries joining other Japanese brewers in unveiling price rises for next year. Budejovicky Budvar, meanwhile, followed suit, saying it would up its prices by between 4% and 6% next month.
While this pattern suggests that it's only the brewers who are having it tough, I think many of you are aware that these pressures are appearing right across the drinks spectrum. Raw materials, packaging, transportation - the costs of all of these are heading north, and it's the consumer who, finally, is getting hit.
How that consumer is going to react to these price hikes will be the sternest test of the much-lauded idea of brand loyalty. Especially here in the UK, there will always be cheap (and cheerful) drinks available in the off-trade. While we’ve had the chance to get comfortable with several global brands over here, we’ve also got used to low prices.
And so, the battleground for next year appears to be set. And all this, before we even start to look at ‘going green’, which could prove more expensive still.
Who’d be a consumer?
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