Budweiser hints at future price rises as cost inflation starts to bite
Budweiser has hinted that it might have to raise its prices in the UK and Ireland in the future as cost inflation continues to hit companies’ bottom lines.
Brian Perkins, group president of Budweiser Brewing Group in UK and Ireland, told Morning Wire, that “no company has been immune to cost inflation”.
Explaining the dilemma many companies currently face, he said: “At some point, you face this tension where you want to do the right thing by the consumer… But you also need to run a business where you employ people. You’re responsible for lots of people’s livelihoods and if you have a contracting business, it doesn’t lead to a good place.”
“We have had massive cost increases,” Perkins said, but added that hiking prices is not the first port of call.
“The first thing we’ve tried to do is mitigate those increases through efficiency programmes, savings initiatives,” he said.
Secondly, Perkins said, some sustainability projects have also helped generate savings.
“We started them for sustainability reasons, but actually, they’ve protected us a little bit from spot prices of energy.” he said.
“And then the third thing that you do is, at some point, you have to pass on some level of price. Whether it’s a McDonald’s cheeseburger going from the sacred 99p [to] whatever it was 129p, at some point, you have to pass prices on.”
“And we do it reluctantly, but we do it because we still want to maintain a viable business that can grow and invest,” he said. “We’re not prepared to make sacrifices on things like the quality of our brands,” he added.
Despite the cost pressures, Perkins hoped that the firm won’t have to cut jobs.
“Our view is that we need to put all the effort into growing our business… if we do that, then those are the types of savings that we don’t need to countenance,” he said.
As inflation hit 10.4 per cent this morning, Perkins also expressed sympathy for Britain’s boozers saying it was “really tough” to run a pub in the current climate, and called for greater government support for the sector.
“This sector has not recovered from the Covid-19 pandemic,” he added.