The cost of beer production has soared over the past two years, driven by rising gas prices and a jump in barley and malt costs.
According to eToro’s Beer Index (see table below), which looks at spot prices of the raw materials required by beer producers, the cost of beer production has risen 62% over the past two years, paving the way for higher beer prices going forward.
Gas costs have seen the biggest increase in the past two years, climbing 138%, whilst barley and malt prices rose 104% and 87% respectively as a result of the Ukraine war. Rice is the only commodity to have fallen in price, dropping 1% due to large stockpiles.
eToro said the 62% increase in the price of beer production dramatically outpaces the 12% rise in UK inflation since July 2020, suggesting “more price pain to come” for beer drinkers.
Ben Laidler, global market analyst at eToro, says: “The average price of a pint has risen by 8% over the past two years to £4.09, four percentage points behind the broader consumer inflation rise. But our Beer Index tells us that stronger price pressures are brewing and stiffer price rises could lie ahead.
“This could be unfortunate timing with the Oktoberfest starting in a couple of weeks and the football World Cup kicking off in November. One winner will be the tax man, with VAT and beer duty making up around a third of the cost of a pint, and overall alcohol sales pulling in an estimated £450 of tax per household.”
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