Lately there has been a sharp focus on the price of groceries, energy and mortgages but the rising price of a cup of coffee, a sandwich or a pastry bought in a cafe or a glass of wine served in a pub has really irked people.Ben has been working in the consumer goods arena for more than four decades and would be very familiar with some well-known brands, so he knows a thing or two about how pricing in Ireland works, from a producer, supplier and retail perspective.
“The debate about milk and butter prices is hilarious,” he writes before offering “some pointers” about the price of butter. He argues that “shortage has driven prices – not cost. Similarly the energy cost of transportation and refrigeration may contribute a couple of percentage points but nothing like the doubling or trebling seen.
Look at the supplier and retailer profit margins, the VAT receipts and corporate tax receipts. They are all up. It’s a good news story for everyone except for the poor eejits paying this every week at the supermarket and restaurantsHe says supermarket costs “are based mainly on rent/lease and staff costs and, other than extra staffing costs for Covid, their salaries have been held at or near minimum wage level and rents haven’t changed.
“We have also lost nearly a quarter of all pubs since the turn of the century. The one thing that we can all agree on is that none of these restaurants and bars are gone because they were making too much money,” he says, quite reasonably. “You can add government failure to act on insurance reform, too, as many businesses, particularly in hospitality, have seen this cost multiply over the last few years. Some operators have trouble getting cover at all. We were closed for almost a year between 2020 and 2021 due to Covid and got a paltry rebate from our insurer despite having no product or public liability risk during that time.”