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Thursday, 7 April 2011

Beer prices ~ just about inflation?

When I went to college in the early 1970s, the prices in the college bar were 13p for a pint of bitter and 11p for mild and, if I remember correctly, lager and Guinness were 15p and 18p.  Out of interest, I put those prices into the historical price converter (bottom of the column on the right), and discovered that if the price of beer had increased in line with inflation, bitter should be £1-30 and mild £1-10.  If only ...

Beer tax at more than £1 a pint must account for some of that, but not all. I suspect a lot of the excess inflation is because most PubCos are up to their eyes in debt taken out when they bought their pubs and financed the purchases by instantly mortgaging their entire estates.  The lower prices in Wetherspoons, which hasn't followed the standard PubCo 'model' of basing a business on as much debt you can get away with, are evidence that this is so.

So, as well as paying excess beer tax, we are paying to service massive PubCo debts.  Somewhere in all this we actually pay for the beer too, but it's a sobering thought that every pint we buy subsidises the PubCo debt junkies as well chucking our hard-earned cash (on which we have already paid tax once) into Treasury coffers.  Sobering, but enough to drive you to drink too.

2 comments:

  1. I certainly agree that we've been fleeced over the years but it's not just the pubcos. There are lots of free houses or small pub groups who try to squeeze as much discount as possible out of the microbrewer and it isn't done to keep beer prices down.

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  2. Yes, I'm sure you're right - it's a point worth making - but how far are they following the example set by PubCos who demonstrated how much they can get away with?

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