This publican says a world with $22 pints is just around the corner
It would have to be among the most expensive pints in the country. At $18.90, the Stone & Wood ale sold at some of the pubs run by Australian Venue Co, a major private equity backed chain, hopefully hits the spot.
Actually, at $18.90, it’s a little better than Tom Francis feared. Francis is the chief executive of Francis Venues – which operates 11 establishments in Melbourne and Sydney – and had put the cost of a pricey pint at $22.
He made the comments as he pointed out the surge in costs that pubs around the country are facing, particularly when it comes to their food and beverage businesses. Changing a menu? Almost impossible.
“We’d put the price up of a steak and then next minute, [the price of] cattle has changed, [and we’d] go again,” Francis told the Financial Review Property Summit. The beer at his venues, he added, was “pretty cheap”.
Then again, the high prices haven’t stopped Francis from doubling down on the menus he’s rolling out across his pubs. He said demand was different now – “probably thanks to MasterChef” – and patrons wanted better food.
“Food and bev is very important, which was something my family wasn’t strong on. I would say they were pretty poor, and they admit it, my dad and my granddad,” he said.
“Ensuring that our executive chefs are really tailoring the menu to the local community of each suburban pub, but also dealing with the cost of living issues has been monumental.”
There’s one thing going in the right direction for publicans, however. Prime Minister Anthony Albanese announced ahead of the election that the government would freeze the indexation on draught beer excise for two years from August. One industry estimate at the time of the announcement suggested the freeze would save drinkers about $200 million.
“Probably at least two or three times a week we’re getting notifications of price increases [from food suppliers]”
Angela Gallagher
Angela Gallagher, who heads the family-run pub group Gallagher Hotels alongside her husband Patrick Gallagher, said every cost in her business had risen since the pandemic, and would continue to rise.
“Probably at least two or three times a week we’re getting notifications of price increases [from food suppliers],” Gallagher said. “And then you’ve got energy prices. Energy prices, I think this year, double what they were last year for some of our venues.
“A lot of the time we wear it like, I just put my daily specials up $2, so from $20 to $22 … because I think most people expect pub food to be cheap, but it’s really expensive for us to buy.”
Gallagher said her pubs hadn’t put beer prices up since the excise freeze.
“I don’t know of any other pubs that have put their beer up. We certainly haven’t,” she said. “We’re really happy that the government has put a hold on that because that’s just another reason for people to be able to come in.”
Peter Filipovic, the former Carlton & United Breweries chief executive turned publican, said pint costs had increased because the cost of kegs had increased. A pint of Carlton Draft, depending on which of his venues drinkers are standing at the bar of, was priced at between $13 to $16.
“Costs have gone up considerably over the last three years and that’s why people are struggling … versus before,” Filipovic said. “When you have a pub as a business, you end up having to increase your pint prices to stay open. If [prices] in the last three years have increased, I would say the next two years would also increase, but I’d love for them to come down.”
And the $22 pint? It was last spotted on Sydney’s northern beaches earlier this year, when it sparked a mini meltdown on social media. Others, however, appeared nonplussed. “Isn’t this the standard in Sydney,” one social media user asked.
