Canadians Brace for Huge Beer Price Hike

Rising cost of barley will result in higher beer prices across Canada.

March 10, 2011

CALGARY - Papers across Canada are predicting national beer prices to rise, citing the increased price of barley as an indicator. "So better drink up now, because next year it??ll most likely cost you more," wrote the Toronto Sun.

"Obviously, when the costs of your inputs increase, it's going to put a strain on your bottom line," said Andre Fortin, spokesman of the Brewers Association of Canada. "So the increase in the cost of barley is something that's very concerning to breweries across the country."

The Sun said the higher costs would be passed on to consumers in the form of higher prices at pubs and liquor stores.

Barley costs have increased sharply this year because of poor harvests in Canada and Australia, two of the world??s primary growers of malting barley.

In fact, according to Lorelle Selinger, manager of barley marketing and sales at the Wheat Board, Canada??s barley crop was so poor that the country couldn??t export any barley, adding that a metric ton of malting barley which currently costs $253 is expected to cost $337 in the coming year, an increase of one-third.

While large breweries like Molson Coors Canada typically lock into long-term contracts that shield them from a barley price hike, smaller breweries are not as fortunate.

However, Ravinder Minhas, co-owner of Minhas Creek Brewing Co., said in the short-term, he??ll keep prices steady, an effort to grow market share as other companies raise their prices.

"We're going to hold on beer prices," he said. "We're going to try and absorb the cost and try to hold the line for as long as we can."

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