Beer prices have risen by $1.89 for suppliers in a sign of inflation taking its toll on the alcohol industry.
A leaked email from Endeavour Group, which oversees Dan Murphy’s and BWS, revealed that they will add an extra $1.89 for each beer carton sent to the distribution centre as a “handling charge” to ease pressure from their supply chains.
The change will apply to suppliers sending products to their national distribution centre in the fringes of Melbourne, where products initially arrive before being shipped around the rest of Australia.
The extra charge will come into effect from May 1 this year, according The Australian Financial Review.
Endeavour Group introduced the handling cost after reviewing its supply chain processes, according to a leaked email.
“Endeavour is currently undertaking a comprehensive review of our supply chain network with the aim of delivering an efficient and resilient supply chain that will unlock value for our suppliers and customers, as well as support our range ambitions,” they wrote in an email sent out to suppliers justifying the additional cost.
They also flagged that this number could rise again this year as they had to keep their handling charge indexed to inflation.
An Endeavour Group spokesperson assured news.com.au that this price change would only impact suppliers, not consumers.
“Like most businesses in Australia, we are faced with rising costs across our network,” they said.
For the past few years, freight costs have remained the same — but the alcohol giant said it could no longer afford to do so.
“During the past few years, we have held costs flat for our suppliers,” they said.
“However, we will now pass some of these additional costs onto our suppliers. Our focus is on working in partnership with our suppliers to ensure our customers have access to our full range nationwide.”
It’s been a tough year for retailers as rising prices and increased fuel costs making it harder to turn a profit.
The drinking industry is in particular in a bit of a predicament as they are beholden to the alcohol excise, a tax they have to pay to the government for any alcoholic beverages that aren’t wine.
The new $1.89 charge could be a sign that for now, the extra costs associated with beer production are not being passed onto consumers, but instead beer suppliers.
Consumers have also been left shocked by rising prices, with many taking to social media over the weekend to complain about rising cereal prices.
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