Happy Christmas – Expensive New Year

BEER drinkers are facing an increase in the cost of their favourite tipples by the start of next year quotes “The Scotsman” newspaper. Brewers will be forced to put up the price of cans by an average of 70p on a pack of four and £2 on larger multi-packs because of the increase in costs of raw materials. Beer prices are expected to increase significantly in pubs too.  

Scottish & Newcastle, Coors Brewers, SABMiller and Anheuser-Busch have each been affected by steep increases in the price of malt, barley, glass and aluminium.  

The price rise is due to Barley prices have risen in Europe partly because of poor harvests caused by heavy rains, reducing yield and quality, while crops in Australia were hit hard by droughts. Fuel, aluminium and glass prices have soared in the last several years.  

Barley and wheat prices have also skyrocketed as more farmers plant corn to meet increasing demands for biofuels such as ethanol. Nigel Pollard, of Scottish & Newcastle, said breweries would not be able to sustain the costs themselves. He said: "Last year we saw wholesale price increases of about 4 per cent which was considered significant. Scottish & Newcastle is reviewing prices for 2008 and I am sure it will be a very challenging year."

Mr Pollard added that it would not just be the price of beer that would increase but other alcoholic beverages such as cider and soft drinks. The average price of barley rose 38 per cent between 2006 and this year, and hops prices have rocketed by 294 per cent since 2004.

Tom Ord, of the Glasgow and West Scotland branch of Campaign for Real Ale, said: "Raw materials are going up in cost, whereas labour prices aren't coming down, so we have to accept that there will be rising costs."

Locally, one Nottinghamshire Brewery has expressed serious concerns about the prospects for the industry, particularly the microbrewers and regionals, in the next year or so. The biggest worry is with the supply of hops with severe shortages anticipated due to poor weather in the US, possibly to the extent that there will be no US hops available to British brewers at all. It is inevitable that there will be large price increases that will hit the pub trade.

Meanwhile, as a result of a price increase for flour, the cost of bread is likely to go up to a predicted average of £1 a loaf.

A Sales

This page last updated: June 3, 2008

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