Some local breweries plan to raise the price of a pint of beer by at least 50 cents over the next few weeks to make up for a 20 to 70 percent jump in the cost of hops and barley.
“In 2008, prices will definitely hit all brewers from Anheuser-Busch down to the mom-and-pop shop,” said Mike McCarthy, director of brewing operations for Capitol City Brewing Company.
McCarthy expects to hike beer prices by 50 to 75 cents per pint to absorb price increases of 30 to 50 percent for malted barley and hops.
Brewers cite a number of reasons for spiraling costs.
“It’s more about climate than anything else,” said brewer Geoff Lively of Rock Bottom Restaurant & Brewery in Bethesda, whose base malt prices jumped almost 70 percent.
The American barley crop was decent, he said, but the European crop didn’t fare well.
Some farmers are also switching to more profitablegovernment-subsidized corn or soybean crops, said Lively, an observation confirmed by all of the brewers who spoke to The Examiner.
“The principal culprit is the conversion to ethanol,” said Gary F. Heurich, founder of the Olde Heurich Brewing Company, which has moved from D.C. to the Adirondacks.
Higher transportation and production costs driven in part by energy prices are also contributing to the squeeze.
Small breweries are having trouble even securing a supply of hops.
“We don’t have any buying power,” said Mike Franklin, owner of the independent Franklins Restaurant, Brewery and General Store in Hyattsville.
He was fortunate to secure a supply of hops by committing to buying a certain amount. He will increase the price of a pint by about 50 cents, from $4 for his standard beer.
Breweries connected to national chains have a little breathing
room for now.
“We have a little cushion as a national company,” said Jim Sobczak, brewer at Gordon Biersch Brewery & Restaurant in Rockville. He has no plans to increase prices at the moment, as his hops inventory is set until March.
Prices will most likely continue to increase in 2008 and beyond, according to Elaine Kub, a DTN market analyst, as it takes three years to get a full harvest of hops.
Breweries are hoping that consumer demand won’t be affected severely. “Beer still remains an affordable luxury,” said Heurich.
