Wednesday, August 26, 2009
Is it true that the business of making and distributing beer is largely recession proof?
I've been led to believe that, during economic downturns, bars and other drinking establishments might have a tough time keeping even their regular customers lubricated at retail prices (and unpaid bar tabs probably rise), but that doesn't mean those regulars are drinking any less than they did when times were good - they just do more of it at home.
This LA Times report details upcoming price increases by the nation's two major brewers who don't sound too concerned about losing any customers.
The nation's two largest beer sellers said Tuesday that they planned to raise prices, although they provided few specifics.Now that sounds like a cool job - working for Beer Business Daily.
"We feel like we will take a moderate price increase on our portfolio," said Peter Marino, spokesman for Chicago-based MillerCoors, maker of Miller Lite, Coors Light and Blue Moon. He blamed higher costs for the price hike.
Like other food manufacturers, brewers have been hit by commodity price increases in recent years, but have not been as aggressive about raising prices, analysts said. Traditionally they raise prices in the fall.
The price increases are part of a strategy by the companies to protect profits rather than market share, said Harry Schuhmacher, editor of the trade publication Beer Business Daily. Consumers should expect to pay more because "retailers will not eat the price increases."