Rising Barley Costs Could Drive Up the Prices of Beer

by Taylor Cunningham
rising-barley-costs-could-drive-prices-beer

Your Yuletide brew will likely come with a much higher price tag this year.

According to the brewer Adnams, the price of the grain is already $0.30 higher than it was this time last year. And by Christmas, the extra cost will be passed on to customers, which means beer prices will skyrocket.

Barley is, of course, one of the main ingredients in most beers. And Ukraine grows around a fifth of the global exports. But due to the war, the world is seeing a major shortage.

As Adnams Head of Production Fergus Fitzgerald shared with the Sunday Telegraph, consumers aren’t feeling the strain just yet. But once it’s time for companies to brew another batch, things will change.

“When it comes to that next supply,” he said, “that’s when we will start to see price increases.”

Fitzgerald also added that the price hike is inevitable. Even if the war ends, the damage has already been done. Barley prices will remain inflated for a while. So sometime around the “third quarter and the fourth quarter, that’s when we’ll see more of this coming through.”

“And if you’re dealing with a 25 percent to 30 percent increase in costs, then you have to pass some of that on to customers,” he said.

Rising Barley Costs Isn’t the Only Thing Affecting Beer Prices

Supply issues with barley aren’t the only ones hurting the beer industry. Martson’s, a U.K. brewer, also announced that it would be raising the cost of its products due to  “soaring energy prices and operating costs.”

While chatting with Express, a spokesperson said that the cost per pint will go up as much as 45p ($0.86) in some places.

“The price increase is a direct impact of the soaring energy prices and operating costs as being experienced by all businesses and households across the country,” they said.

And earlier this month, Chief Economist for the Brewers Association Bart Watson admitted that beer drinkers are already starting to see productions strains reflected on price tags.

“Packaging increases, labor cost increases, supply chain cost and shipping increases, barley, and malt increases. And we’re starting to see that translate into consumer prices,” he told Fox Business. “What we saw in the February (consumer price index) numbers is that inflation is starting to pick up in beer, though maybe still lagging in the overall consumer price index.”

In only two months, the average cost of beer has gone up 2%. That is the typical amount most companies raise prices in a year.

Outsider.com