BREWING giant Scottish & Newcastle has warned its wholesale customers that it is to raise beer and cider prices by 3.5 per cent and 3.9 per cent respectively.
The increase will come into force next month and is thought to be the start of moves by brewers to shake off continuing price deflation in the UK drinks market.
Britain's largest brewer is also believed to be trying to soak up high energy costs t
hat have hit the brewing industry in 2006.
Scottish & Newcastle, whose brands include Newcastle Brown Ale, Fosters and Kronenbourg 1664, wrote to its major wholesalers late last week to tell them of its plans.
The Edinburgh-based brewer S&N, headed by chief executive Tony Froggatt, has hinted that it will push for a similar price rise in supermarkets when it starts its annual negotiations with retailers in March.
Beer prices fell 3.4 per cent last year in the off-trade market. Scottish & Newcastle's move comes at a time when there is growing discontent among retailers at the heavy discounting, which has seen the industry accused of encouraging binge drinking.
A Scottish & Newcastle spokesman is reported as saying: "We think that cider can take that level of price increase.
"We are investing heavily in cider and recycling much of the profits back into the apple industry."
Last month the company clinched a sponsorship deal to provide the drinks at the first ever Hogmanay bars on Princes Street.
