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Beer Prices Going Up This Fall
August 27, 2009

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News Summary

Two of the largest brewers in the U.S. have announced plans to raise prices on their signature products this fall, although the amount of the increases has not been disclosed.

The Associated Press reported Aug. 25 that Anheuser-Busch and MillerCoors both signaled their intention to raise prices, with local markets determining the size of the increase. "The markets have been assessed, and we'll be acting on a by-market, by-brand and by-package basis," according to Anheuser-Busch. "Pricing has been very strong on the MillerCoors portfolio and we believe that we can take a moderate price increase in the fall," added MillerCoors spokesperson Pete Marino.

The increases come as sales volume has fallen for some of the companies' top products, such as Bud Light and Miller Light. Beer prices in general have been increasing, up an average of 5.3 percent in 2008 and another 4.6 percent as of July 2009.

COMMENTS ON THIS ARTICLE:

Posted by Jim Paoni on 28 Aug 09 12:35 PM EDT
The price increase may have additional benefit in reducing availability to youth using the same evidence of even small tax increases due to the increased cost. However, price sensitive consumers such as youth may look to other value-priced brands to offset this. I suppose the brewers understand the trade-off in increasing prices/profits versus low prices to entice new drinkers and solidifying brand loyalty with younger drinkers. As noted, the brewers say the local markets have been assessed and they'll be deciding price increases for local markets. I'm presuming that the increased alcoholic beverage taxes in some 'local markets' this year will be part of the decisions, either with lower/no brewer price increases where taxes are raised to offset price-sensitivities or I can also see brewers strategizing to do both, leading to a double-whammy that they can then use PR and 'concerned citizens' to rail against the impact of tax increases as if the increase was just due to taxes, thus generating future pressure against additional tax increases. I have also heard recently that local distributors are set to add price/profit increases on top of the tax increases and blame all of the increase on the taxes; "we're just passing it along to consumers".

Posted by jgogek on 28 Aug 09 07:23 PM EDT
It's funny that the alcohol industry lobbyists always complain to elected officials that increasing alcohol taxes will create immense economic hardships by costing jobs, and then the industry raises prices itself. How come price increases by the industry itself won't costs jobs? And why should anybody listen to industry complaints about how terrible alcohol taxes will be?

Posted by David Macmaster on 29 Aug 09 01:39 PM EDT
In Wisconsin our legislature raised cigarette taxes another 75 cents a pack. They also passed a long overdue smoke-free work place law; both policies increased demand for tobacco services. Then they cut funds for tobacco harm reduction by 55%. The same legislature refused to increase the beer tax already one of the lowest in the nation to help fund our alcohol and drug services. Now the alcohol industry is going to raise beer prices to increase profits. Wisconsin has cut its alcohol harm reduction and treatment services while the beer industry increases profits. So, our elected lawmakers cut resources for reducing harm from tobacco and alcohol while allowing booze and tobacco business to flourish and prosper. When is government going to stop putting business profits before public health? At least government should protect the public by providing enough funds to help those of us who deal with the very real downsides from tobacco and alcohol. But there are no powerful advocates to speak for the victims of tobacco and alcohol so they have no strong political voice to protest or pay off politicians for their support.

Posted by Vetanalyst on 31 Aug 09 01:11 PM EDT
You are right, David. There are no powerful advocates for health and safety. If anything is going to change, that change will have to come from the grassroots, i.e. a groundswell of community-based action to counter the wealth, influence and political power of an amoral industry.

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