Ban on barley is brewing up future trouble

Grain prices have been on an upward trend for some time now and the Russian ban on grain exports following the severe drought in many part of that country over this summer, has led to a spike in prices.

Depending if Russia decides to extend the ban into 2011 or not, this recent spike should not really affect the price of beer in any significant way ; major brewers all hedge the long term cost of the barley they use in the brewing process to avoid the effect of exactly this kind of price spike.

However the longer term trend in food prices, in a world where populations and wealth in highly populated countries is expanding significantly, will eventually make its way through to the cost of the humble pint.

Any panic is probably overdone, but longer term increase in the cost of the raw materials which go into the brewing process will filter through into the price of the average pint in years to come and without significant change in legislation, will further squeeze the margins of pubs and bars in the UK.


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Source – Daily Mail 

Date – 10th August 2010

Submitted by – Peter Mayhew