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Cold Expense

Restaurant owners fear drop in sales if beer prices rise

September 6, 2009
By MIKE ZUMMO, The Leader-Herald

The nation's two largest beer makers are planning to raise prices in the fall and the effect may be felt in patrons' wallets.

Last week, Anheuser-Busch, maker of Bud Light and Budweiser, and MillerCoors, maker of Blue Moon and Miller Light, both said they're going to raise prices.

But neither brewer would say how big the increases would be.

Article Photos

The Leader-Herald/Bill Trojan
Jim Peters, owner of Pour Jim’s in Mayfield, pours a beer for a customer Wednesday.

"I understand that their expenses go up the same as ours do," said Jim Peters, owner of Pour Jim's on Route 30 in Mayfield. "It's not a good time for the local people here because there's a lot of job losses."

Peters said an increase would force him to raise his own beer prices, and he said he was sure that would result in a decrease in business.

However, he said he wouldn't expect a decrease in patrons.

"I don't believe people will stop coming out, but I'm sure they will limit themselves," Peters said.

Price increases have been helping insulate revenue results for MillerCoors, a pairing of SABMiller's U.S. unit and Coors Brewing Co., from the increasing trend of consumers limiting their spending.

Anheuser-Busch said in a statement it plans on raising prices on a majority of its volume in the bulk of its markets this fall, too, to cover some increases in its costs.

Sales of Miller Lite - MillerCoors' flagship - and Bud Light - the top brand for Anheuser-Busch - have both been suffering amid the recession.

Don Blanchard, owner of the Rail Yard on West Fulton Street in Gloversville, said he hadn't heard from Anheuser-Busch or MillerCoors about a fall price increase.

Helen Botch, the restaurant's manager, said if the increase isn't that big, the restaurant will just absorb it.

"The whole thing is that all of us as a restaurant group, we're sucking up the costs," Blanchard said. "If people come here and I raise the price, then they're not going to come here."

Blanchard said during the recession, it's difficult for restaurants to survive. However, he said the consumer dictates what he carries.

"Until the consumer says I don't want to drink Budweiser [or Miller], I'm going to carry it," he said. "They're making the decisions and not me."

Prices across all beers have been rising. In 2008, the price of beer, ale and other malt beverages sold for at-home consumption rose 5.3 percent, according to the government's Consumer Price Index. As of July, prices on those same items were 4.6 percent higher than they were a year ago.

"You're held hostage," Blanchard said. "It's like going to Motor Vehicles to renew your driver's license. No matter what the price is, I need my driver's license."

The Associated Press contributed to this report.



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