Beer maker Red Stripe has increased prices on its brews by $7 ($8.20 with consumption tax) to distributors of its pro-ducts, but says those who imbibe should pay no more than an additional $10 at the cash counters of bars or supermarkets.

The increases include Smirnoff Ice and all beers, but excludes Malta.

Red Stripe Managing Director Mark McKenzie, asked by Wednesday Business to explain the comment on pricing at the retail and wholesale levels, said while his company cannot dictate the shelf price of its products, it nevertheless felt that a $10 increase would be sufficient for them to "recover cost and maintain their margins."

"Red Stripe's recommendations in relation to prices impose no obligations on customers to resell at the recommended prices," McKenzie said.

Price adjustments

"The customer is at liberty to make whatever price adjustments they deem necessary in order to remain competitive."

The new prices, which took effect May 26, add 9.5 per cent more on average to Red Stripe's portfolio of brewed products, whose old prices, excluding GCT and deposit, ranged between $67.24 for Red Stripe lager to $74.75 for Smirnoff Ice.

The company has cited the increase in the special consumption tax for the increase, but like competitor J. Wray and Nephew Limited has opted not to increase prices on the spirit brands it distributes on behalf of parent Diageo.

A single rate of 25 per cent SCT was placed on beer and spirits, except white overproof rum. A flat rate of US$0.40 per litre on wines, cordials and liqueurs was unchanged.

McKenzie sidestepped a question on whether the decision to maintain prices on Johnnie Walker, Baileys, Smirnoff Vodka and flavours, Smirnoff Black, Myers Rum, Trelawny Gold Label Rum, Bell's Whiskey, VAT 69, Black & White Whiskey, J & B Rare Whiskey, Tanqueray, Gilbeys and Gordons Gin was a local decision made in Kingston or passed down by Diageo, but did hint that its rival was a factor.

"Red Stripe/Diageo determines its pricing policy based on a number of key principles, including a consumer-based approach, relativity of current price to the competition, both for our customers and consumers, among others," he told Wednesday Business.

Distributor

Up to a year or more ago, Lascelles, a sister company to Wray and Nephew, was distributor for Diageo spirits brands, but the business was taken over by Red Stripe.

J. Wray and Nephew, purveyor of the Appleton and Wray & Nephew brands, praised the new 25 per cent flat rate on beers and spirits, saying the new regime replaced "a lop-sided structure that had historically accommodated incentive and concession programmes for certain alcoholic beverage producers."

The new rate took effect May 11.

business@gleanerjm.com