GUINNESS-OWNER DIAGEO will increase the price of its beers from next month due to inflation.

The price increase, first reported by Virgin Media News, will add 12 cent to the price of a pint, excluding VAT.

The company said it had absorbed cost increases “for as long as possible”, but it could no longer do so.  

The Vintners’ Federation of Ireland, which represents publicans, has called on Diageo to reconsider the move, adding that publicans will most likely have to pass on the price increase to their customers.

In a statement to The Journal, a spokesperson for Diageo said: “Like many businesses in Ireland, we are facing significant inflation in input costs across our operations.

“We have absorbed these costs for as long as possible but unfortunately, we can no longer continue to do so,” the spokesperson said.

“As a result, we have written to our customers in the on-trade to advise them of an increase on our draught beer list prices of 12 cent per pint, exclusive of VAT.”

The price change will be applied across the whole Diageo draught beer range and will take effect from 1 February 2023.

Other beers distributed by Diageo include Hop House 13 and Smithwicks.

It comes after Heineken increased its keg prices by 9% in November, following “significant increases in the cost of energy, packaging, and raw materials”.

The increase added 17 cent plus VAT to the price of a pint.

Commenting on the matter at a press conference this afternoon, Taoiseach Leo Varadkar said he thought the increase would cause financial hardship for publications when combined with other rising costs.

“I think pubs form a very important part of our economy and a very important part of our tourism offering, our welcome and a very important part of our social fabric as well,” Varadkar said.

“I don’t think a 12 cent increase in itself is going to put any pub out of business but I suppose with combined rising costs, it will cause financial hardship for many.”

The Taoiseach also encouraged people to apply for the Temporary Business Energy Support Scheme (TBESS).

The Vintners’ Federation of Ireland has said the announcement by Diageo is “further bad news for the pub trade already grappling with soaring energy costs, inflation and the general increase in the cost of doing business”.

Vintners’ CEO Paul Clancy said: “Following the increase in Heineken prices in December, this is the second major price increase our members are having to deal with in a few short weeks. Publicans are getting hammered from every angle at the moment and this news from Diageo is a further blow to the trade.

“We’re heading into the quietest few months of the year for the trade so the increase in the price of a pint couldn’t come at a worse time,” Clancy said.

Due to the unprecedented cost of doing business publicans will have to pass on this price increase to their customers, which is something they are very unhappy about.

“It’s well documented that energy costs are at all all-time high, while at the same time the trade faces losing the 9% hospitality VAT rate at the end of February. The trade can’t keep taking these hits on what appears to be an almost weekly basis. The VFI is calling on Diageo to reconsider its decision in light of the pressures on the pub trade.”