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Pint of beer could hit £4 next year
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25 January 2007
The massive hike, which is also expected to affect cans bought from off licences, is due largely to increased prices of key ingredients barley and hops - in part because farmland is being turned over to environment-friendly biofuels.
But brewers are also suffering from rises in fuel costs and the price of the metals used to produce kegs and cans. Kegs are now so valuable that they have become a target for thieves, who stole 60 million this year to melt down for their metal.
Mark Hastings, director of communications at the British Beer and Pub Association, told BBC Radio 4's Today programme: "Food prices have increased dramatically and that has affected, for us, the price of barley and hops, which have rocketed tremendously.
"But on top of that, we have also got increases in commodity prices, so for example, with the kegs and cans that we put beer into, the cost of metal has escalated dramatically.
"On top of that, because kegs are such valuable items we are losing a lot of them - about 60 million a year are being thieved at present to smelt down into metal.
"Then we have also got things like fuel prices, which affect both the cost of producing the beer in the first place and then transporting it to and from pubs, because beer is quite a bulky product and it actually costs quite a lot to drive it to and from places.
"All these factors have increased the cost of being a brewer quite dramatically. Brewers have been clinging on for the last two years, trying to contain prices and we have seen consolidation in the market - brewers buying out other brewers to try to contain costs. We have also seen job losses in the sector - about 2,000 have gone this year.
"But now there is no more to carve out of the business so the only thing that we are able to do is to put prices up. Nobody wants to do it. The last thing the industry wants is more expensive beer."
Mr Hastings said the price hike came against a general decline in British beer sales, with some 14 million fewer pints a day being served in pubs than in the past.
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