'There is lots of evidence of resistance to prices,' he said yesterday. 'Consumers want better standards in pubs but not higher prices. That is the great issue facing the industry.'
Wolves is more exposed to the pricing issue than many other brewers because of competition from local clubs, which sell beer at 80p a pint - 27p less than its pub prices. Those figures contrast starkly with the average pounds 1.65 charged in London pubs for a standard pint of bitter.
Wolves runs nearly 1,000 pubs and most are in the Black Country, where male unemployment is almost 14 per cent.
Economic problems, combined with the price war among the big brewers, kept the lid on Wolves' profits in the year to 3 October. Profits before tax rose from pounds 35.2m to pounds 36.5m, including a pounds 1m fillip from an extra week's trading.
The share price dipped 2p to 534p on the results. The dividend is lifted 10.5 per cent to 12.6p.
Wolves said evidence of improved consumer confidence had yet to turn into a sustained increase in spending. 'It is smart to say you've saved money, rather than say you've spent money,' said Mr Thompson, who is predicting a 2 per cent drop in national beer output next year to about 34 million barrels.
Wolves has gone on the offensive in its trading heartland, attempting to resolve an over-supply problem by selling pubs on a de-licensed basis - 19 have been closed so far.
Mr Thompson added: 'We need to realign distribution into areas of high economic growth and increasing population. We are increasing outlets in the East Midlands, Wales and the South-west.'
Fuller, Smith & Turner, the London-based brewer and operator of 202 pubs, reported flat profits of pounds 3.76m for the six months to 2 October. The interim dividend is 2.52p (2.4p). Anthony Fuller, chairman, said: 'Prospects for 1994 seem brighter. Pockets of recovery are already evident.'
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