London June 4 2022: The price of a pint in London has long been bemoaned as the sign of how expensive it is to live in the capital.
However, as crowds flocked to central London to toast the Queen on the jubilee bank holiday weekend, some would have been staggered if they ordered a round of drinks in one pub, after it emerged the the average price of a pint has topped £8 for the first time.
The average price of a pint has risen by more than 70% since the financial crisis nearly 15 years ago, from £2.30 in 2008 to £3.95, according to research by the consultancy CGA .
In one pub in London, which CGA did not name, the average price of a pint was £8.06 – the most expensive it has ever recorded, in its survey of more than 5,550 random bars and pubs.
The cheapest was in Lancashire and cost £1.79.
If prices had solely followed inflation between January 2008 and April 2022, the cost of a pint would have been £3.35, the Financial Times reported.
Since 2020, CGA’s figures show that the cost of an average pint has risen by more than 7%. Further increases are expected.
The price hikes have been driven by a combination of factors, including inflation and the war in Ukraine. The country was the world’s fourth largest producer of barley, a key ingredient in beer. Analysts Bernstein warned that costs of malting barley could reach 70%.
These issues add to existing problems for pubs after a turbulent period during the Covid-19 pandemic. Since reopening in 2021, they have had higher food and drink supply prices, exacerbated by delays to cross-channel deliveries since Brexit, and a shortage of staff as customers returned.
This led landlords to offer higher wages to attract and retain workers, but further ate into their profit margins.
Suffolk brewer and pub company Adnams warned in March that barley prices meant they were likely to increase prices for customers. Wolverhampton-based Marstons increased prices by 8% in March, and customers in Greene King pubs are now paying 5% more on average per pint.
Clive Watson, the chair of City Pub Group, which operates 41 pubs in London and the south, told the FT that ingredient costs were up 10%, “wage inflation is probably 7% and electricity inflation is 100%, so that blended cost price probably puts the price of a pint of beer up 12% to 13%”.
CPG raised its prices by 5-6% in December, but said it would hold back on further increases to encourage people to go to the pub. A trend followed by others after 18 months of stop-start closures during the Covid pandemic.
