Cobra chairman: ‘No running away’ from beer price increases
Price hikes for beer are a “necessity” against a backdrop of spiralling costs faced by businesses, according to the founder of Cobra Beer.
Firms have been hit with rising costs across the supply chain, including manufacturing, energy and labour with consumers facing rising food prices and utility costs.
The food and drink industry faces a “vicious cycle” of spiralling costs, Cobra Beer’s Lord Bilimoria told BBC Radio 5 live’s Wake Up to Money programme.
He added: “Our input costs in every way – bottling, energy – are up. 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 is now the chairman of Cobra and holds the role of president of the Confederation of British Industry, would not provide an estimate for how much more Brits could have to spend on a bottle of beer.
The peer’s comments echo warnings made by Tesco chairman John Allan yesterday.
The chief of the country’s largest supermarket cautioned that “the worst is yet to come” in the coming months, with grocery bills set to soar.
The average amount of household income spent on groceries was about nine per cent last year, but could rise to 15 per cent by the spring, he told the BBC’s Sunday Morning.
The country’s largest supermarket was “doing all we can” to offset rising inflation, he said, but pointed out Tesco was not immune to skyrocketing energy and labour costs.
Hospitality bosses have also echoed warnings of price rises, with one industry survey finding that nearly half of operators will be forced to hike prices more than 10 per cent this year.
Some 15 per cent of hospitality businesses warned they were anticipating hikes of more than 20 per cent in the year ahead, a survey from trade body UKHospitality suggested.
It comes after retail and hospitality firms faced a disappointing festive period, amid the emergence of the Omicron Covid variant and related restrictions at the end of last year.