The price of a pint of beer could rise by as much as 10%, or 30p, as the soaring cost of barley adds to increases in duty and VAT, experts have predicted.
The cost is likely to increase by 4.25% to 6.5% this year due to the duty escalator alone, which increases by the rate of inflation plus 2%, The Grocer reported.
But the trade magazine said other costs “ignored” by the Government in its calculations included ingredients, packaging and distribution.
Diesel was up 35% year on year, cardboard costs had also risen 35% and other major ingredients associated with brewing, such as barley and wheat, had almost doubled in price.
Experts were predicting that British barley prices in particular – already up 90% in 2010 – would rise even higher as global barley production was set to fall by 43% on last year’s volumes to a four-year low as farmers switched to more lucrative crops such as wheat.
Campaigners criticised the Government’s announcement this week to ban the sale of alcohol below cost price, saying it would not go far enough to resolve the problem of binge-drinking.
The ban was promised as part of efforts to tackle alcohol-related crime and disorder which costs the taxpayer up to £13 billion each year.
But the much-touted move will see cost price defined as just duty plus VAT and will have little if any impact on cut-price supermarket deals, campaigners said.
Mintec analyst Robert Miles told The Grocer that as the Government attempted to reduce binge-drinking by setting a higher price on alcohol, “commodity price rises might get there first, and force prices higher for all concerned”.
Brewers and pub chains also fear that while the hikes are certain to hit the on-trade, where the average pint has risen by 2% and now exceeds £3 for the first time, there is additional concern that supermarkets will continue to subsidise alcohol, where prices have risen by just 1% in the last year – according to price tracking website BrandView.co.uk.