22 October 2007

Beer Prices on the Rise

The Salt Lake Tribune is reporting that beer prices are set to rise fifty cents to a dollar a six pack over the next year. The story cites recent poor harvests and farmers switching to more profitable crops as the main cause, and price increases in glass, cardboard and stainless steel are contributing.

More worrying is the fear that it could slow the growth of the craft beer sector, 5% of the nation's beer sales.

The news worsened for craft brewers significantly in recent weeks. Firms that turn barley into brewing malt informed craft brewers of price increases ranging from 40 percent to 80 percent, and hops suppliers announced increases ranging from 20 percent to 100 percent, depending on the variety of hops.

The price of hops - which give beers their bitterness and aroma - has risen because of shortages across the globe, due in part to poor crops in Europe. Some European brewers are competing with American brewers for hops grown in the Pacific Northwest.

For years, hops were cheap due to a glut. That prompted growers over the past decade to replace hops with other crops, such as apples. Now, the amount of hops acres world-wide is about half the total of 12 years ago, says Ralph Olson, a hops dealer with Hopunion CBS LLC in Yakima, Wash. That has caused some hops varieties to quadruple in price over the past year, he says.

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posted by Jeff Holt at 08:33

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