Following the most recent round of brewery price increases, I paid £3.20 for a pint of Robinson’s Dizzy Blonde (3.8% ABV) in a pub within the boundaries of Stockport MBC. This compared with a previous price of £3.05, and so represented an increase of nearly 5% - and that’s before the next round of the duty escalator. There’s at least one pub I can think of within the borough boundaries where it would probably be at least 10p dearer, while on the other hand you could get the same beer, or the slightly stronger Unicorn, for £2.60, only a few miles away in and around the town centre.
On the face of it, such differentials may seem hard to justify when the underlying cost of the beer is identical. However, it must be remembered that these pubs are tenancies, not managed houses, and licensees are entitled to make their own judgment as to the appropriate level of pricing for their local area. Pub company owned pubs in the Stockport suburbs are already charging similar prices, and out in the leafier parts of Cheshire the typical price of a pint is well north of £3. Those with an interest in economics may also want to consider the concept of embedded rent, which is especially relevant to products such as pub drinks which are consumed at the time and place of purchase and not stored.
While it is undoubtedly true that differentials between pubs owned by the same brewery have widened over the years, it has always been the case that some pubs, often those serving a more prosperous clientele, have charged a price premium. And you can now see similar differentials in the Holts estate, once renowned for uniform low prices, between their “improved” pubs and their more traditional boozers.
A further factor is that customers of pubs in more salubrious areas will not only have more money in their pockets, but are also more likely to be diners and so will view the cost of their pint as part of their overall spend. A 50p differential on one or two pints will be neither here nor there if you’re spending £15 or more on a two-course meal, but if you’re going to the pub for a six-pint session you will be much more price-conscious.
The question must be asked, though, as to whether the trade as a whole is taking decisions which from the short-term perspective of the individual pub may seem to make sense, but in the long-term are likely to seriously erode business by continually raising prices above the general level of inflation, let alone their customers’ disposable income.