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'Sticker shock' on suds as beer prices leap up

By: Geoff Kirbyson

Posted: 03/8/2013 1:00 AM | Comments: 0

Nick Zifarelli (above), owner of Nicolino's Restaurant and The Orbit Room (JOE BRYSKA / WINNIPEG FREE PRESS ARCHIVES) Photo Store

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Manitoba beer drinkers might start returning their empty bottles instead of throwing them in the recycling bin after one of the largest-ever price hikes kicked in at midnight this morning.

A 12-pack of your favourite mainstream beers went up by about $2, thanks to price increases from the major breweries, an increased cut for the Manitoba Liquor Control Commission and licensee markups.

Twelve bottles of popular brands such as Budweiser and Kokanee, for example, now cost $23.75, a toonie more than they did on Thursday.

Labatt and Molson typically raise their prices around this time of year but this is the first time since 2010 the MLCC has increased its share, according to spokeswoman Susan Harrison.

"We've only had three markups in the last nine years. We take the markups very seriously. We work with the (provincial) government to establish net-profit targets," she said.

When the MLCC last raised its markup in 2010, the cost of a 12-pack went up by $1.25.

A couple of dollars might not seem like much in the big picture but it's enough to worry Bill Gould, president of WETT Sales, distributors of beers such as Moosehead, Samuel Adams, Cracked Canoe and Tennent's Lager.

"I think we're in a little bit of uncharted territory," he said, referring to the size of the price hike. "I think the consumer will react. There is always the concern it will mean less volume (for breweries)."

Gould said he thinks the higher beer costs could have an even bigger impact on restaurateurs and bar owners.

But that depends on what kind of beer they're selling. Mainstream brands are the hardest hit while microbreweries have been left relatively untouched. A 12-pack of bottles of Fort Garry Dark Ale, for example, only went up 35 cents to $23.70.

Nick Zifarelli, owner of Nicolino's Restaurant and the Orbit Room in Fort Garry, said he's going to leave his prices untouched because at $4.25 per beer, he's already on the cusp of charging too much.

"It's getting a little goofy now. (The increase) is almost two bucks a (case), that's basically a 10 per cent hike," he said. "We're going to eat that for now."

The impact will be minimal at Inferno's on Academy, too, according to manager Raj Maniar.

"Our beer list is craft-oriented. We have Half Pints, Fort Garry and Unibroue. We don't carry Budweiser, Coors Light, Miller Genuine Draft and Labatt Lite," he said.

The MLCC will also be increasing the price of spirits by $0.622 per litre as of April 1. That translates to at least a 47-cent increase on a 750-millilitre bottle.

What restaurants and pub owners have going for them is the demand for beer, as it tends to be for other items such as cigarettes and gasoline, is inelastic.

"When you see a price hike like this you say, 'holy smokes!' You hope the consumers will have some sticker shock but then they'll go back to buying it," Gould said.

geoff.kirbyson@freepress.mb.ca

Republished from the Winnipeg Free Press print edition March 8, 2013 A5

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