Your next visit to the pub might leave a bigger hole in your pocket after East African Breweries Ltd (EABL) yesterday increased the recommended retail price for most of its products.
The brewer said the adjustment was prompted by an increase in the cost of doing business, including an increase in excise duty that they did not pass to the consumer.
The review by the region’s largest alcohol firm will see the prices of some popular brands such as Gilbeys, White Cap, Kenya Cane and Johnie Walker go up as EABL tries to balance between growing revenues and keeping costs down.
“We haven’t increased prices since 2019, despite the excise inflationary adjustment in 2020. We have absorbed costs over this period,” said Eric Kiniti, the corporate relations director.
The recommended retail prices for Tusker Lite, Tusker Malt and Whitecap Light will each go up by Sh20 from Sh160 to Sh180.
However, to prevent a flight back to the infamous second-generation drinks, low-end brands such as Chrome and Senator Keg were spared the price hike.
Low-income consumers tend to be price-sensitive and an increase would likely trigger a reduction of the quantity of alcohol they drink, or they seek alternatives that might even include illicit alcohol.
Tusker Lager, EABL’s signature beer, was also spared the hike.
A bottle of Balozi beer will retail at Sh160 from Sh150 while Guinness FES (500ml) will sell at Sh190, an increase of Sh10.
A 750ml bottle of Gilbey’s Gin, a hit during the Covid-19 period, will now retail at Sh1,250 from Sh1,200.
Consumption of Gilbey’s Gin during the Covid-19 period has shot up, giving rise to what many boozers have termed a “gin revolution”.
A 350ml bottle of Gilbey’s will retail at Sh600 from Sh580 as the brewer tries to make up for the losses it has absorbed in the last year.
Whiskey lovers will also find the going a little tougher after EABL increased the price of 750ml Johnie Walker Red Label by Sh50 to Sh1,850.
A 750ml bottle of Johnie Walker Black Label will go up by Sh100 to retail at Sh3,600 while Singleton 15 Years will retail at Sh6,100 from Sh6,000.
Other than increased excise duty, Kiniti said higher fuel costs over the last two years had also driven up EABL’s operational costs.
“During the Covid-19 period, we have also seen rising costs in our raw materials, specifically resulting from logistical challenges and inflation in the last year,” he said.
The removal of a tax incentive that the government had put in place to cushion businesses during the pandemic, despite some restrictions still being in place, also contributed to the EABL price hike.
Consumption of alcohol in the last few months has been negatively affected by Covid-19 protocols that saw restaurants and pubs closed to curb the spread of the disease.
Currently, pubs and other entertainment joints are expected to close at 7pm.
Interestingly, in the first nine months of the 2020-21 financial year, Kenya Revenue Authority collected Sh162 billion against a target of Sh153 billion.
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