Tipperary pub to continue selling €5 Guinness despite Diageo price increases

Pub owners were hit with the news last week that Diageo, owners of Guinness, Carlsberg and Smitwicks, among other brands, are set to increase the prices of their products.

The increase is the fifth raising of prices that the company has announced in the last three years.

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Price increases include a 7% increase on Guinness, with a 10% increase in the cost of Guinness 0.0%.

Vintners across the country have been outspoken on the increases, with many declaring that the costs are becoming too much for consumers, thus driving them away from pubs.

Many pub owners are taking it into their own hands to combat this on the side of the consumer, in a bid to ensure that people are still able to go to their local pubs for a drink.

One such pub is Kennedy’s of Rea in Rearcross, owned and operated by Grainne Harte and her husband James Maher.

Grainne and James bought the pub a little over a year ago, and from the off, announced that they would be dropping the prices of a pint of Guinness to €5, with the aim of getting more customers in the door.

Speaking with the Tipperary Star, Grainne outlined the effect the rising costs from Diageo will have on vintners, and the frustration many are currently experiencing.

“I'm part of some of the vintners, Whatsapp groups, and so on. And obviously, there's desperation as to where it’s going to end, it keeps going up. We're not hearing there will be a further rise, but it will then be paused for a period of time. So that's not coming through. So there is no setting of prices. There's no certainty that if we reach to this next level, that it will stop, or that we will be a break, basically, of rises. So there's no certainty. So we're already seeing significant closures of rural pubs. It's not so much about the rising price in the sense, it's what it's doing to rural pubs.

“There was a time that pubs were seen as nearly a cultural place to be, not just about drinking, but it was a tradition, it's where people come when they come home for Christmas, when families meet together, whether you know that be family get togethers or funerals or just people living on their own, that may be their only social outlet, and it's part of our traditions for rural pubs. But now it's starting to feel like it's a luxury product and that it is not for your normal individual, that it is now a luxury to be able to go out and have a drink, and certainly from a rural pub and a cultural point of view, that is not what we want, and that's why we're digging our heels in, saying ‘we bought this pub because we wanted to be part of a rural community.’”

Grainne spoke of the importance of rural pubs in Irish culture and society, and what led them to decide to cap the price of a pint of Guinness at €5, saying: “It's the light on sometimes on dark nights. When you go through a small village and it's your light on there, it's where you know you're going to have a chat with someone. The fire is lit, and I'm sure it's the exact same in many rural pubs throughout the country. But it has to stop somewhere, and we do not want to lose the culture of that get together for people, that outlet for people.”

Grainne spoke of the shift in social culture over the years, stating that in the past, young people would socialise solely by going to a pub, however today, with the rapid increase in prices, many young people are turning to drinking in excess at home before heading to the pub.

“Nowadays, what's happening is, and I see it with, I have a 19 year old myself, and I see it with nieces and nephews, this pre-drinking culture is kicking in, where you have young people drinking in excess, because they know when they actually get to the pub or the venue, they can't afford to drink anything more than one or two drinks there. And it worries me. We should be encouraging young people, that it's not just about drinking, this is a social space, and if you do want to have a drink, it is affordable, and that we're not taking away their inclusive spaces, their places to meet, their places to have a chat. Yes, we're in business. Yes, we want to make money, but rural pubs are about more than alcohol, and that's why we're putting the foot down and saying we're not doing this. We have to think of the generations that are coming. We're asking them to stop doomscrolling. We're asking them to stay off the phones. We're asking people to talk to each other. Yes, if we keep increasing the prices, we are alienating the future.”

Grainne called on other pubs across the country to make a stand against the increases by Diageo, stating that the only way to make a difference is collectively.

“It's not going to end unless publicans stand together, stand united, and refuse to buy it, it needs to be a group of people who are brave enough to say ‘we will not buy this product. We will not alienate the people around us, and we are not going to alienate your middle class people who are at the point where they can't afford what Diageo is doing now making it a luxury product. It has to stop.’ And as I said it, this is not about us staying at a flat fiver and not increasing any of the other drinks either. This is not about pitching one publican against the other. This is more than about money. This is ethics as well. This is about tradition and culture. Otherwise we are going to see more rural pubs closing.”

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She spoke of how decreasing the price of a pint of Guinness has resulted in a growth in customer loyalty, and brought about an increase in business, both in the pub and in their shop, leading to great vintner-consumer relations.

“What I found was, by reducing it to €5, we actually got more footfall. We actually ended up making as much as when it was at €5 because more people came. So more volume came, we were buying more kegs, and then obviously, the more kegs you buy, you earn more credits towards more kegs. So there's business sense there as well. And obviously sales increased through that.

“But equally, what increased was more people who came in to buy Guinness, then started looking at other products as well. They may go into our shop and get a hot takeaway dinner. Buy some milk, the bread, the butter, some buns, apple tart. By getting extra footfall into the pub, it was then that secondary sales that we started to see increase as well, and also from the perspective of other people seeing the pub and the lounge, and what we could offer, started to book more events. So then I would say, I suppose the other benefit is the loyalty. The loyalty of customers, repetitive business that keep coming back to you because they see that you're giving back to the customer.

“So rather than it just being about sales, particularly about Guinness, are things that we would have seen were increased secondary sales of other products, both alcohol and both food products, increased footfall and increased business in relation to bookings and events.”

Grainne touched on the fact that since their announcement that the price of a pint of Guinness had been pushed back to €5, business has been flourishing, and that they are taking every step necessary to ensure this continues for as long as possible.

“We put in a new dart board, but it's a state of the art scolia dart board. It's an automatic scoring dartboard, and we have our pool table there and so on. So, for example, last night, there were five young lads in there after their soccer training, 19, 20 years of age. They had three pints each, and they were playing pool and darts, and they were chatting away, just nice, easy going conversation, having a good time together. And it was a Wednesday night, you know? Then in the front bar you may have maybe another eight or nine people, older people, who are maybe just living on their own, again, a different offering for a different age group, but everybody there having the one thing in common. They want human company. While each of those people were sitting there last night, if they consumed one other product, just one, that, what you would get from the one other product, would be twice what you were losing by not raising the money on the pint. So there's a logic to the madness, is what I'd say.”