Beer prices 'to rise by 70p' next year

Published on Monday 12 November 2007 00:18

BEER drinkers are facing an increase in the cost of their favourite tipples by the start of next year.

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.

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

Paul Heggarty, of Coors Brewers, explained: "We are facing very severe price pressures for barley as well as other raw materials. The increase in prices will ultimately be passed on to the consumer."

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, aluminum 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.

Graham Bell, of the Edinburgh Chamber of Commerce, said that it had long been concerned with the issue of food prices.

Mr Bell said: "A sudden thirst for biofuels has imposed an extra burden. Supermarkets may be able to absorb the price increase but small traders are always going to be affected.

"If a farmer can make more money making fuel oil, that's what he'll do and not worry about beer drinkers."

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."

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.