Brewers have warned that packaged drinks will become more expensive and could rise by a bigger margin than pub pints.
Key points:
- Brewers say drinkers will feel the pinch whether they’re in the pub or the bottle shop
- Rising aluminum prices will drive up the price of canned beverages
- This month’s rise in excise tax on pure beer is the highest in 20 years
Independent and larger-scale breweries across Australia are feeling the pressure of a recent excise tax hike, as well as soaring aluminum and ingredient prices.
Wilson Brewing Co founder Matt Wilson said brewers had tried to keep prices as low as possible, but it was inevitable that they would rise.
“You’re not just going to see an increase in prices for pints at the pub, you’re actually going to see a bigger increase in packaged goods that you would buy and take home to drink,” he said.
Pressure on excise duties
The alcohol excise tax increases every six months, and the most recent 3.84% hike for non-alcoholic beer was the biggest in 20 years.
Mr Wilson said brewing costs had risen by around 60% over the past two decades, and that had passed on to consumers.
“You could see a $5 to $10 increase in the price of cartons around Christmas or even before that,” he said.
“The unfortunate thing about excise taxes is that they never come back.”
Everything goes up
There are several entries that go into making and brewing beer, all of which have swelled.
Mr Wilson said aluminium, used to wrap beer cans, was increasing in cost.
“Grain, barley in particular, is the highest specification of grain barley a farmer can grow…so his direct energy input costs are directly reflected in the price he charged for his grain,” Wilson said.
“Grain [is probably] our third most important contribution.”
GrainGrowers managing director David McKeon said Australian barley prices were trading above historical averages.
“Across Australia we are looking at offers between the low and mid three hundred for barley [dollars per tonne] … that’s a pretty steep price,” he said.
He said it was important to not just look at the raw price of barley going into an end product.
“We find that many other factors influence many of our processors, manufacturers and retailers… some of them [being] challenges with supply chains, transportation costs, labor costs and energy costs,” Mr. McKeon said.
Resources analyst Tim Treadgold said aluminium, a popular material choice for packaging, was an expensive item to produce due to the amount of energy it required.
“In order to get the can through the plant on a truck to the bottling or packing depot…the trucks that get there run on liquid fuels, which are also expensive,” he said. .
“The energy input into the whole process has increased dramatically in all facets of production.”
Worse than COVID-19
Independent Brewers Association chief executive Kylie Lethbridge said she had concerns for the industry.
“We’ve come through the last two years of the pandemic relatively well, but we’re not in recovery mode by any means, in fact some think that’s more of a challenge,” she said.
She said skills shortages, equipment shortages and challenges such as transportation costs would be applicable to all businesses in the country.
“If these waves keep hitting, then a business can only handle what it can handle, and unfortunately that may mean we lose…some independent breweries across the country.”
“The challenge… for the consumer is that the price of beer is going to go up whether you drink it at the pub on tap or pick it up at the bottle shop,” she said.