- Although the Russian invasion is on the other side of the globe, it is already beginning to wreak havoc on some sectors of the world economy.
- Ukraine plays a key role in barley production.
- Officials from the United States Department of Agriculture have stated that beer prices in the country could increase.
NO BEER BECAUSE OF THE WAR? Although the Russian invasion is on the other side of the globe, it is already beginning to wreak havoc on some sectors of the world economy. Alcoholic beverages for example. That’s the reason people are wondering if there could be a shortage of beer due to the Russian war with Ukraine.
The truth is that, although many people do not know it, Ukraine plays a fundamental role in the production of barley. In fact, it is one of the world’s top five producers of this important ingredient for beer production, according to global agricultural data.
Will there be a shortage of beer due to Russia’s war with Ukraine?
Officials from the United States Department of Agriculture have stated that beer prices in the country could increase due to the invasion of Ukraine by Russian troops. They add that there could be a shortage of barley, according to 790 KABC.
The authorities assure that, despite the ongoing armed conflict, the large brewers in the United States should have the capacity to continue their operations. Even if some raw materials are in shorter supply, prices of beer shouldn’t be significantly affected.
Will there be a beer shortage?
However, the story could be different for small breweries. Those businesses could be heavily hit by supply shortages. Eventually some may be forced to increase the price of their beers up to 50 cents or more per unit.
Jim McGreevy, President and CEO of The Beer Institute, stated: “Ukraine accounts for about 20% of beer’s usage of barley. It’s one of the top five global producers of barley, so brewers, particularly at a global level, will be watching the supply and price of barley.”
Beer prices on the rise
The war in Ukraine will inevitably influence beer prices to some degree. Large brewing companies such as Molson Coors will be able to absorb the higher costs of raw materials, but for craft manufacturers it will be an uphill battle.
Andrew Gierczak, who is vice president of MobCraft Beer, commented, «It’s really hard for us to absorb price increases in raw materials without passing that along to the customer.» Ultimately, manufacturers paying more for ingredients will cause people in the United States to pay more for their beer.
Beer prices may increase by 50 cents or more
For example, at Milwaukee’s St. Paul Fish Market prices are still holding up. However, Paul Johnson, who works as a bartender there, told KOLD News13 that other surrounding bars had already increased their prices by “50 cents for a glass of beer.”
Paula Kennedy commented: “I have been drinking beer since I was too young to drink beer. I will continue.” This seems to indicate that for some people a slight increase in the price of this alcoholic beverage would not be enough to stop them from consuming it.
Even Mexican beer
But not everything is about barley. In Mexico, the brewing industry not only faces enormous uncertainty due to the armed conflict in Ukraine, but also faces a shortage of glass and cans to be able to package the popular alcoholic beverage.
Karla Siqueiros, general director of Cerveceros de México, said: “Inside the Cámara we are analyzing the impact that the shortage of glass could eventually have on the Mexican brewing agribusiness. We have glass. The groups have made investments, but as a united industry we are working on finding alternatives that allow us to face this demand situation, both for glass and cans.”
Will the Mexican beer industry make it?
The truth is that 73% of the ingredients and materials required for the production of beer in Mexico are produced locally. This includes barley. However, that does not mean that the sector does not feel the global impact of a war. They need hops, for example.
“Regarding some supplies that we import, it is hops that are not produced in Mexico due to geographic and climatic conditions on the scale required by the brewing industry. It is not that the product is not there, is more about the combination, such as fuels inside supplies, pulp for the manufacture of cardboard, parts of the containers,” said Manuel Cedillo, who is director of economic studies for Cerveceros de México.
The Mexican beer industry recovered during 2021, after the impact of the pandemic. According to the Instituto Nacional de Geografía y Estadística (Inegi), last year, Mexico produced 134.5 million hectoliters of beer that were sold for 223,803 million pesos.
According to the Secretaría de Economía, in 2021, Mexico sent 278,361.38 hectoliters to Russia, and 109,260.64 hectoliters to Ukraine and although each of these countries represents less than 1% of Mexican beer exports, if they stopped selling they would also mean a setback, reported El Financiero. They reveal if there will be a shortage of beer due to Russia’s war with Ukraine.
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