Tuesday, January 20, 2009

Deflation, what deflation?

The latest inflation figures were published today, and show CPI falling to 3.1% and RPI (which is influenced by mortgage interest rates) to a mere 0.9%. It has been widely predicted that some measures of inflation may even turn negative during the coming year as the recession bites. In this climate, it seems singularly inappropriate for InBev to be announcing a swingeing price increase of 7p per pint, which could easily turn into 20p at the bar once retail mark-up and VAT are applied.

Now, I don’t normally drink any InBev products, so it won’t affect me personally, and if it leads pub operators to seek alternative suppliers in the independent sector it will be no bad thing. But a lot of people do drink InBev beers, and this will undermine the general pub trade still further.