Rosie Davenport
Multiple retailers have slammed Interbrew for claiming that beer discounting is devaluing the market.
In a new market report, the Stella Artois brewer says buy one get one free deals and discounting are eroding profitability and brand loyalty. The company analysed sales of two of its rival brands during a bogof, and discovered that both had a lower share of the market six months after the offer than before it started.
But Interbrew admitted it could see the benefit of promotions in the short term, finding they prompted 25% of consumers to switch brands and a further 18% to buy the discounted beer plus their usual choice. In contrast, it added that its own free glass giveaway had added value and allowed retailers to sell more at full price.
On pricing in the multiples, Interbrew said: "It only takes one retailer to set off a price war at a time when major retailers are committed to price matching. The question is how low will prices go?"
Adsa's beer buyer Mark Spowart said: "The people who wrote this report are detached from reality because this is not what sales teams are saying. The market is so competitive consumers know they can get a 24-pack for £12. If Interbrew is so concerned, why don't they refuse to supply anyone with over 20,000 cases on a weekly basis and stop the volume going out? A free glass promotion isn't going to give them the kind of volumes they are looking for."
Richard Barnes, category buyer for lager at Safeway, said: "In theory brewers don't want to do promotions but some have to because they have volume targets they don't know how to reach and go for a short-term fix."
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Multiple retailers have slammed Interbrew for claiming that beer discounting is devaluing the market.
In a new market report, the Stella Artois brewer says buy one get one free deals and discounting are eroding profitability and brand loyalty. The company analysed sales of two of its rival brands during a bogof, and discovered that both had a lower share of the market six months after the offer than before it started.
But Interbrew admitted it could see the benefit of promotions in the short term, finding they prompted 25% of consumers to switch brands and a further 18% to buy the discounted beer plus their usual choice. In contrast, it added that its own free glass giveaway had added value and allowed retailers to sell more at full price.
On pricing in the multiples, Interbrew said: "It only takes one retailer to set off a price war at a time when major retailers are committed to price matching. The question is how low will prices go?"
Adsa's beer buyer Mark Spowart said: "The people who wrote this report are detached from reality because this is not what sales teams are saying. The market is so competitive consumers know they can get a 24-pack for £12. If Interbrew is so concerned, why don't they refuse to supply anyone with over 20,000 cases on a weekly basis and stop the volume going out? A free glass promotion isn't going to give them the kind of volumes they are looking for."
Richard Barnes, category buyer for lager at Safeway, said: "In theory brewers don't want to do promotions but some have to because they have volume targets they don't know how to reach and go for a short-term fix."
{{MARKETING }}
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