First oil, now beer: the rising cost of necessities
The rising cost of hops, fuel, and aluminum is creating a perfect storm for beer makers--and by perfect I mean horrible. The cost of these economic realities may soon be passed on to the innocent beer consumer, and even worse, it's the microbrews that will likely be hardest hit. On the plus side, though, at least now there's a justifiable excuse to stock up.
Thanks to high gas prices you're shelling out more to drive to the beer store and thanks to a series of economic challenges facing brewers you may soon have to fork over even more cash for a case of suds.
Brewers big and small are trying to cope with the high cost of energy, aluminum and hops this summer. They've managed to bear much of the increase but may soon be forced to pass the buck to the consumer.
"We've been able to shield the consumer up till now, we've been able to absorb those costs," Paul Gautreau, brewmaster and vice-president of operations for Calgary-based Big Rock Brewery, said. "How long that will go on I'm not too sure, but at some point there's going to be a break point and we'll have to share some of those costs with the consumer."
The price of hops has risen sharply after farmers abandoned the crop following a decade-long oversupply. Now beer makers are dealing with a worldwide shortage. Aluminum costs have skyrocketed thanks to growing demand in China and India.
The summer also got off to a cool start in many parts of the country, which apparently quelled Canadians' need to down a cold frosty one.
And the sky-high cost of fuel is forcing brewers to rethink their transportation costs.
The increased costs of making beer are apparently hitting the smaller brewers the hardest. The big players, including Molson Coors and Labatt, haven't been greatly affected, according to BMO analyst Orin Baranowsky.