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REALLY TRAGIC BEER NEWS

Price of beer seen going higher
By LAUREN SHEPHERD
ASSOCIATED PRESS
1/10/2007

NEW YORK – Before making a beer run, lager lovers may soon need to start searching suds-soaked sofas for a few more dollars and cents thanks, in part, to the rising cost of barley.

Production numbers are down and costs are up for the grain, one of several used to make beer. Combined with soaring energy costs and the high cost of other raw materials, like aluminum, analysts caution those extra dollars and cents may soon be passed along to consumers.

In fact, several breweries are already raising their prices due partially to raw material costs. Anheuser-Busch Cos. of St. Louis is planning a price increase for early this year, and earlier this month, Mexican brewing and bottling firm Femsa said it will raise beer prices to recover the higher costs of aluminum, glass bottles and barley and to keep up with inflation.

“Raw material costs have gone up so much in such a short period of time, it’s unavoidable that you will see some price increases eventually,” said Morningstar analyst Matthew Reilly.

Barley prices have steadily inched up each month, ending 2006 averaging $3.19 per bushel in December – an increase of about 24 percent from December’s average price of $2.57 in 2005.