World: Cost of commodities used by brewing industry up 62% in last two years

The cost of the commodities required for the production, packaging and transportation of beer has risen by 62% in the past two years, according to social investing platform eToro’s inaugural Beer Index.

eToro, based in Israel, noted the rate of price growth “dramatically outpaces the 12% rise in the UK consumer price index over the same period, indicating there is likely to be some price pain to come for beer drinkers as brewers look for ways to offset their costs".

The eToro Beer Index is based on current spot prices of a basket of six commodities needed for producing and selling beer - wheat, barley, rice, malt, aluminium (for cans) and gasoline (for transportation and farming).

Since August 20, 2020, the Beer Index has risen by 62%, with eToro noting the war in Ukraine was playing a significant role in the costs brewers are currently facing.

Ben Laidler, global market analyst at eToro, said: “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."

eToro said gasoline - required for farming the ingredients of beer as well as for the transportation of the product - had seen the biggest price rise of any item in the beer basket, with its cost jumping 138% over the two-year period. The investment platform flagged the effect of the war in Ukraine and the restricted supply of crude oil coming from Russia.

Barley and malt costs have surged by 104% and 87% respectively in the same period, with Russia’s invasion of Ukraine again having pushed these prices higher.

Rice is the only commodity in the Beer Index to have dropped in price in the past two years, falling by 1% since mid-August 2020.

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