Anheuser-Busch InBev, MillerCoors and Heineken N.V. each announced last week their respective plans to increase prices. Raising prices amidst a rocky economy and rash of beer excise tax increases (Illinois, New York, North Carolina, Rhode Island) has some operators scratching their heads.
“We are going to hold off on any retail price increases when these wholesale price increases are raised. We are going to wait at least 60 days and review our financial reports before we considers any retail price increases,” says Edgar Carlson, a principal with Houston, Texas-based Hospitality USA, the operator of 20 Sherlock’s Baker St. Pub, Baker St. Pub & Grill and Watson’s House of Ales locations, who prides himself of offering a wide range of both draft and bottled beers. “Our thoughts are not to take it out on our loyal customers and so that’s why we would not consider any immediate price increases.”
Not all operators may be able to absorb the price increases, especially those who have already taken their beer prices down as a measure to attract guest traffic during the consumer belt-tightening of this recession.
The other issue raised by the announcements by Anheuser-Busch and MillerCoors is the potential for anti-trust review. The two brewers control the vast majority of the domestic beer market in the U.S., and some observers hint that their respective decisions to raise prices almost simultaneously may raise the ire of the Obama administration.