Beer Industry

UK beer prices pushed up by ‘vicious cycle’ of costs, says Cobra founder

Bottles of Cobra lager Show caption The Cobra Beer brand was founded by Lord Bilimoria in 1989. Photograph: David Levene/The Guardian
Cost of living crisis

Lord Bilimoria joins chorus of business leaders warning that consumers will face more price rises

Beer drinkers are going to have to pay more for their pints because the industry faces a “vicious cycle” of surging costs, the founder of Cobra Beer has said.

Lord Bilimoria, who has turned Cobra into a household name since founding the brand in 1989, said soaring costs across the supply chain, from manufacturing and energy to freight and staffing, meant prices would have to rise.

“Our input costs in every way – bottling, energy – are up,” he told BBC Radio 5 live’s Wake Up to Money programme. “Freight costs have soared, sometimes 10 times. Wages are increasing and on top of that there are labour shortages. It does mean that businesses have to put up prices. But the consumer is already feeling the squeeze. It is a really challenging situation for everyone.”

Bilimoria, who would not be drawn on how much more drinkers would have to pay for a bottle of beer, joins a chorus of business leaders warning that consumers would soon face another round of significant price rises.

On Sunday the Tesco chairman, John Allan, said the “worst is yet to come” on food price inflation as he predicted it would reach 5% by spring.

Households face a significant hit to finances with inflation at a 30-year high of 5.4%, energy bills set to soar under new price cap rules from April, and tax increases expected.

“Price rises are a necessity, there is no running away from that,” said Bilimoria, who reiterated his opposition to the government’s plan to increase national insurance in April. “This is completely the wrong time to do this,” he said. “It will stifle investment, it will stifle growth.”

Late last year hospitality bosses urged consumers not to desert their local pub during “dry January”, when many people make a new year pledge to abstain from alcohol, as venues struggled to recover from poor Christmas trading.

Takings over the festive period, seen as crucial for pubs, bars and restaurants, slumped as much as 60% compared with pre-pandemic levels as the industry suffered for a second Christmas in a row.

In November, members of the Wine and Spirit Trade Association warned of a potential Christmas alcohol shortage owing to supply chain chaos caused by a lack of HGV drivers.

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