Analysts are predicting beer prices to rise in the UK and Europe next year due to the summer’s heatwave which scorched the region’s barley harvest.
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A recent report issued by the investment bank Berenberg, is forecasting that the cost of a beer WILL rise in the UK and Europe due to the soaring cost of ingredients, and barley in particular which was fried by a monumental heatwave over the summer leading to significant grain shortages.
In fact the financial report suggests that the rising cost of barley, an estimated 20% of a beer’s production costs, could lead the world’s biggest brewers, such as Heineken and Carlsberg, to be facing “a rise in production costs of around 16% going into 2019.”
According to Bloomberg barley crops in northern Europe were damaged in the unseasonable hot and dry weather that has plagued the continent. Yields of key barley producers in Scandinavia, northern Germany and the Baltic countries were as much as 30 to 40 percent below normal, according to trader Evergrain Germany.
In Scandinavia, exceptionally hot weather spread wildfires across Sweden. But it also led to barley harvests that were as much as three to four weeks earlier than usual.
And for the first time in eight years the European Union is facing malting barley shortage of 490,000 metric tons this season, according to RMI Analytics.
“By the end of August, UK barley prices were up 37% year-on-year,” according to The Guardian “while in France they were up 23%,”which puts the world’s barley stocks at their lowest levels since 1984 according to US Department of Agriculture.
And it’s not just grain shortages that will be impacting the price of beer across the pond. The price of aluminum used to make beer cans rose 20% in 2017 and it’s already up another 8% this year.
It’s been a tough year for beer in the Europe and the UK, what with CO2 shortages that led to beer rationing in some regions. And if Berenberg’s recent report is even close to correct, things could get tougher.