Beer Pricing Policies....Race to the bottom?

I have always had a certain element of pride at how we run our business here at Blackedge. When Shaun & I started this business 8 years ago we set out to produce and sell a high quality product for a fair price whilst keeping our costs to an absolute minimum. 8 years on and our business plan has remained un-changed. We are a responsible, legitimate & above all a sustainable business.


There are many breweries out there (you know who you are) doing their utmost to tear the industry wide apart with their totally unsustainable pricing policy, selling in some instances totally inferior product but not all ,at prices that are just not 'sustainable' for their business or for the industry as a whole. We have increased our prices once in 6 years due to the fact we had absolutely no choice but to do so, in effect reducing our margins in the previous 5 years as costs or raw materials, energy, fuel etc.. continued to rise.


I have personally witnessed invoices recently with cask prices of £38. I have also seen invoices whilst a brewer delivered for 3 casks of beer yet 4 were dropped???? Of course some of those brewers are probably not in the bracket of totally legitimate and probably still making the margin they desire by screwing the tax man and probably suppliers too 😮. What these breweries are effectively doing is changing the market price for beer negatively whilst our costs increase year on year by quite significant amounts (thanks guys).


When we started to employ people we prided ourselves on paying our work force at above minimum wage yet over the past couple of years the wages of our trusted and valuable workforce have grown ever closer to minimum wage as we quite simply can no longer afford higher due to reduced selling prices and increased costs.


What really irritates me is those brewers choosing to affect industry pricing with their quite frankly ridiculous price, who are in effect using any duty relief to reduce the sales price of their beer. Duty relief for small brewers is well documented. We pay half duty if we brew under 5000 hectolitres per year. This reduction is designed to give us the opportunity to invest in and grow our business not give it away as a price reduction. It is there for us to invest in new equipment to ensure continuity of quality, to invest in our people to ensure we get the best, to invest in strategic growth. By giving this relief away not only are breweries risking their future (the relief wont be there forever)! but don't have the funds to maintain current equipment, workforce, infrastructure. There is a part of me that thinks well bugger them, they wont be here in a year, I will and I am sure some people reading this think exactly the same however, it is the effect these brewers have on the overall market price of beer that affects all of us.


Brewers all brewers are affected by a reduced market price whilst costs of production increase. Drinkers are affected by the sub-standard ales on the market taking us back to the dull days of the 70's and 80's when cask beer in particular was on its arse!


I decided to note my thoughts today as I start the process of writing to our suppliers in an effort to try to reduce our own costs to keep us on a continued sustainable working basis whilst thinking to myself, I don't like doing this! I am trying to influence a reduction in our costs this makes me no better than brewers that are crushing our industry.


There was an article yesterday that warns of further increased costs for breweries (feel free to read, article link below) so I just wanted to write this to the brewers out there that are selling themselves and the rest of us well short. Good luck in the future guys!!


https://www.theguardian.com/food/2018/sep/11/beer-prices-set-to-rise-after-heatwave-hits-barley-harvest

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