Beer-lovers in Newcastle may have noticed their favourite schooner costing more lately… and local pubs are starting to feel the pinch.

The Grand Hotel manager Lukas Thodas says price rises have been building for some time, hitting smaller venues hardest.

“They’ve been high for a while,” he admitted.

“It’s hard for us to absorb the increases because we’re a smaller venue.

“Passing costs onto customers is tough.”

Mr Thodas explained the latest hike was due to broad cost pressures rather than government taxes.

“Electricity, insurance, the cost-of-living, everything’s up,” he said.

“Breweries are paying more to make beer… and that’s reflected in the prices.”

Over the past year, wholesale costs at The Grand Hotel have increased by roughly 15-20%, with a more recent jump of 5-6%.

At the bar, mid-strength sits about $8.90, mainstream full-strength $9.80, and craft beers are hitting $10.

Despite higher prices, Mr Thodas says most Novocastrians are understanding.

“People might drink less or adjust what they order, but they’re aware we need to raise prices,” he said.

“Foot traffic hasn’t dropped drastically.

“Some customers who might have come in for dinner and drinks are now just coming in for a few drinks instead but, overall, people are still coming in.”

Beyond beer, pubs are facing rising costs for electricity, insurance and staffing.

Mr Thodas warns that the increasing expenses are putting smaller venues under serious pressure.

“We’ve already lost a few bars and restaurants in Newcastle over the past six months,” he told the Newcastle Weekly.

“Margins are so tight now that operating safely and sustainably is becoming almost impossible.”

Pub owners across Australia are being forced to raise prices after major breweries like Lion increased its costs due to higher material, labour and transport expenses.

This spike comes despite a two-year freeze on the beer excise, which started last August under the federal government.

A spokesperson for Lion, the brewery behind well-known Australian beers including XXXX, confirmed the challenges facing the industry.

“Despite a welcome pause in excise rises for tap beer, the brewing and hospitality industries have continued to experience cost inflation over the last couple of years, and market conditions remain difficult,” they said.

“Since we last made an adjustment to our tap beer prices at the beginning of 2025, we have experienced significant increases in a range of costs.

“We have made the difficult decision to raise prices on some of our tap beers.

“It’s important to note that almost all of our key brands remain more attractively priced than their major competitors.”

Mr Thodas has a clear message to the government.

“We need a full look at the whole system,” he said.

“Taxes like payroll tax and other expenses are piling up and, at some point, businesses just can’t survive while covering these costs.”

As Newcastle pubs navigate higher prices, both local managers and breweries are urging customers to understand the broader pressures.

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