Crying In Your Beer Over Its Price
Champagne taste on a beer budget?
Think again!
Just like the cost of food, some beer prices are skyrocketing, and you can expect to pay more for your favorite brew this summer, reports The Early Show consumer correspondent Susan Koeppen.
"It's never been this bad," observed Eric Ottaway, general manager of the Brooklyn Brewery, which makes several craft beers, a sector of the beer industry that's been hardest-hit.
"I've had to raise prices," Ottaway says. "We took the biggest increase we've ever taken here at the company this year."
Brooklyn Brewery has raised prices 10 percent -- translating into $1 more a six-pack.
"In the beer world," he explains, "that's a gigantic increase. Normally, we raise prices three-four percent, but a dollar is a gargantuan amount."
The price of beer is going up because it now costs more to make it, for several reasons, Koeppen points out.
First, high gas prices make it more expensive to haul beer.
And there's a shortage of beer's main ingredients. The cost of malted barley is has doubled, and hops have more than hopped -- they've skyrocketed some 500 percent.
"In 2008," Ottaway says, "it will cost us about a million more dollars to make the same beer we made in 2007."
Even large breweries, such as Anheuser Busch, are feeling the pinch. The maker of Budweiser says the increased cost of its ingredients has lead to price hikes on its beers.
"The situation with ingredients is not going to abate anytime soon," predicts Benj Steinman, publisher of a beer industry newsletter, Beer Marketer's Insights. "It will continue to exert pressure on pricing for the foreseeable future."
Steinman says, in some markets, such as Florida, California and Arizona, consumers are changing their drinking habits: "Some people are switching to lower-priced brands, because of the economy."
But, says Koeppen, even with price increases, consumers continue to throw them back.
"We're actually very happy that, despite all the economic turmoil, people are still buying beer. We say that, when you're happy you drink and when you're sad you drink, but either way, you're still drinking!"
The Labor Department says the average price of beer has gone up about four percent -- that's in stores and in bars and restaurants, as well.
The big breweries are weathering the storm, Koeppen adds, but "the little guys," that can't get the ingredients, are having a tougher go of it, and, "The some of big guys are actually releasing some of their supplies of hops and malted barley to help them survive."
Imported beers, by and large, hasn't seen the price hits that domestic suds have, due to the dollar's exchange rates.