UK: Interbrew poised to hike Stella prices

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Interbrew has announced plans to increase the price of Stella Artois in the off-trade. The move follows a period of pricing deflation which has eroded value for brand owners and retailers, the company said.

In a statement, Stuart MacFarlane, managing director of take home at Interbrew UK, said: "Retail competition and consolidation has not allowed any headroom for growth in the retail price in recent years with the result that value has been eroded.

"The fact is the real price of beer has been declining for some time which, of course, is good news for consumers but not so good for brand owners and retailers because of the significant impact on profitability.

"This is why there is a pressing need for the industry to take steps to increase the value of the category and we are now addressing that situation."

The price of Stella Artois in shops has fallen from £2 a litre in 1997 to £1.85 a litre now.

"Growing pressure on operating costs makes it even more important that the issue of deflationary retail pricing is tackled now," MacFarlane added. "The brands that are best placed to drive value in the market are big brands like Stella Artois and Tennent's Lager because of the strength of their consumer appeal.

"They provide the most significant opportunity to increase beer market value and are uniquely well placed to lead by example. Market-leading brands play a critical role in setting total category value because they have a big influence on the pricing of all the other brands in their product sector."

Interbrew UK will increase prices, particularly on its core brands, Stella Artois and Tennent's Lager, across the whole of its customer base from the end of January. "It is all about customers being able to enhance their margin through the power and consumer appeal of these brands," said MacFarlane.

Interbrew did not say how much its price will rise by.

Last year, Interbrew sold £592m worth of Stella Artois in UK shops, with its nearest rival, Carling, selling £318m.

Sectors: Beer & cider

Companies: Anheuser-Busch InBev

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