Beer becoming increasingly costly

No product is immune from inflation. And though the slow economy has made most of us tighten our belts, it seems costs continue to rise. As the barbecue season rapidly approaches beer prices is still rising at a rate we haven’t seen for three years.

Higher and higher prices of beer

In January and February beer prices went up 2.6 percent, showing a steady increase in 2011. In just a year, there was a rise from 5 percent to 8 percent on domestic, specialty and non-alcoholic beer prices. Craft beers have been hit especially hard. Prices are up 42 cents a case since last year, according to Paul Gatza, who is director of the Brewers Association.

Still working to get enough hops

The essential ingredient in beer is hops. Most of these come from Germany. It is where about 35 percent come from of the world’s supply. Just three years back, there was a huge hops crop problem in Bavaria. This is Germany’s largest state. Brewers worldwide felt the crunch, prices rose and, though the crunch has lessened somewhat since then, they are still scrambling to make up for it.

Growing grain has been hard

If you do not count water, another significant ingredient is grains. Most use malted barley. It is very common. Grain production is down this season due to a drought in China and a devastating heat wave in the Ukraine region of Russia. Without these crops, the price of beer continues to go up. It has been hard on corporations. According to the International Monetary Fund, the price of barley has risen to $196.37 per metric ton from $137.30 last year.

Increase in fuel

It is also essential to consider transportation. It plays an essential role. Raw materials have to be delivered to the brewer before they’re also shipped from the manufacturer to the customer. Every bottle of beer rises with the cost of bio-fuels.

Pub closures in the U.K.

The pressure is everywhere in the world. England is suffering a small company crisis as pub after pub, which is a mainstay of their local economy, is closing down. While the smoking ban and recent tax hikes have also been blamed for this trend, the largest reason appears to be the main difference in cost of drinking out and drinking at home.

“I would drink in pubs if the prices were not so high,” said Pete Jayes of Corby, England. “You can buy it for half the price in the supermarket.”

Citations

Daily Finance

dailyfinance.com/2011/05/19/whys-my-beer-so-expensive-the-forces-behind-a-sudsy-economic-i/

Evening Telegraph

northantset.co.uk/news/local/corby/jobs_fear_over_the_rising_cost_of_beer_1_2503350

Fox Business

foxbusiness.com/personal-finance/2011/03/17/raise-glass-higher-beer-prices-st-patricks-day/