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Bad news, beer lovers! CEO says price hikes coming

Buffalo Wild Wings has news for beer lovers that could be hard to swallow: Prices are going up.

This fall, the company expects major brewers to boost draft beer prices—a move that will trickle down to Buffalo Wild Wings' customers.

Beer Buffalo Wild Wings
Source: Buffalo Wild Wings

"We have said that we will pass on price increases this year," CEO Sally Smith said in an phone interview. The hikes on alcohol will begin in August, it announced Tuesday on its conference call.

"I don't have a specific increase. Our price increases typically represent 2 to 3 percent and vary by market," she added.

The move would affect its company-owned locations, which comprise about 50 percent of the total. Franchisees set their own prices. Currently, alcohol represents roughly a fifth of total sales.

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Last year, a couple major suppliers boosted prices while a couple chose not to, Smith said.

"Their input costs are going up just like ours are—whether it's wages or taxes or insurance," she added.

U.S. companies are facing additional wage pressure this year from minimum wage hikes that are rolling out in many states and cities across the country. Falling unemployment has also boosted labor costs as the available pool of workers shrinks.

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Buffalo Wild Wings blamed these higher labor costs coupled with increased food prices, particularly in chicken wings, for a drop in earnings last quarter.

As for the major suppliers, news of price hikes has already started. Earlier this week, Beer Marketer's Insights reported Constellation Brands, which sells beers like Corona Extra and Modelo, plans to raise prices by 3 percent this year.