DB in front in traditional post-Budget price rise

Beer prices will rise as usual on June 1, and struggling market king Lion has again opted to trail rival DB in the rise on packaged beer.

Lion's packaged beer prices will increase by 3 per cent compared to DB's rise of 4 per cent.

But both big brewers will put their tap beer prices up by 3.9 per cent - up on last June's 3 per cent.

The mid-year price rises are a post-Budget tradition to cover excise tax increases, but this year the breweries said they were trying to claw back sharp rises in fuel and raw material costs such as glass, barley and malt, while retaining market share in a fiercely competitive trading environment.

The excise increase was 2.8 per cent.

Last year DB put wholesale and packaged beers up by 6 per cent, lifting the price of a dozen bottles by around $1. Lion put pack prices up by about 5.5 per cent.

Lion's price rises in particular irked Cambridge Cosmopolitan Club manager Bill Garth. He got word in the mail last week of Lion's price increases minutes after reading in the Business Herald that Lion Nathan had learned a lesson from price increases last year. Half-year earnings from Lion's New Zealand business slumped 8.8 per cent and revenues were also down as drinkers rejected Lion's price increases.

Garth said 99 per cent of the club's beer sales was tap beer. The club had to pay Lion more for beer than it would have to from a supermarket. "The whole thing is a farce," he said.

Lion Breweries chief executive Peter Kean said Lion's wholesale tap beer price was $2.81 a litre. Pubs and clubs resold it for $6 to $8 a litre. Lion had no control over the retail price.

Price rises

Lion
Packaged beer: 3 per cent
Tap beer: 3.9 per cent
Brands: Lion Red, Steinlager, Speights, Stella Artois

DB
Packaged beer: 4 per cent
Tap beer: 3.9 per cent
Brands: Heineken, Export Gold, Tui and Monteith's