Beer Prices Are Going Up

[ColdWaterConch]

http://www.cnbc.com/id/24525326

Beware to all you thirsty souls out there: Your summer brew just got more expensive.

From craft breweries to the world's largest brewer, Belgium-based Inbev, beer companies across the board are raising prices at the tap, trying to keep up with soaring energy, grain and aluminum costs.

Blaming 9.5 percent surge in cost of sales, Inbev earlier today announced an unexpected drop in first quarter profits and said it is hiking beer prices across the world to help offset inflation. The maker of Stella Artois and Beck's is not alone, and industry insiders say this may only be the first taste of price hikes.

"Prices have gone up 4.3 percent since the turn of the year," said Brewers Association director Paul Gatza, "It wouldn't surprise me if that goes up even further."

InBev's profit fell to 249 million euros ($384 million) in the first three months of the year, down from 280 million euros in the same period in 2007.

It came in well below a forecast of 341 million euros ($526 million) by analysts surveyed by Dow Jones Newswires.

Revenue rose 4.8 percent to 3.19 billion euros ($4.92 billion), up from 3.05 billion euros a year ago, again missing analysts' more optimistic forecast of a 9 percent surge. Overall volume sales fell 0.4 percent.

The problem?

Beer makers are facing a double whammy with inflation running high and supply shortages in beer's two principal ingredients: hops and malt. Hops gives beer its flavor, while malt barley creates alcohol during fermentation. In the last year, the cost of both is exponentially higher and rising.

“The shortage is pretty bad,” said Gatza. “Certain hops varieties are not available at any price.”

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