Bitter to eat: the cost of producing beer increased by 62% in 2 years

The global cost of goods necessary for the production, packaging and transportation of beer increased by 62%. over the past two years - it follows from the first ever Beer Index developed by social networking eToro platform.

In a nutshell

• The eToro Beer Index analyzes the global prices of raw materials required by beer producers - from barley and malt to aluminum and gasoline for packaging and shipping;
• Gasoline costs increased the most in two years, by as much as 138 percent, while the prices of barley and malt, due to the war in Ukraine, jumped by 104 percent, respectively. and 87 percent;
• Rice is the only commodity whose price has fallen by 1%, thanks to the fact that for the past 15 years every year production has exceeded demand, leading to a large stockpile;
• 62 percent the increase in beer production prices dramatically exceeds 15,6 percent. CPI growth in Poland from July 2020, which indicates that beer lovers' wallets will suffer even more;
• The price of a standard bottle of beer in a Polish supermarket increased by 28%. within two years, 10 percentage points above inflation
• Taxes account for almost 40 percent. beer prices in Poland.

Beer index up 62%

The rate of price increase drastically exceeds 15,6 percent. increase in the Consumer Price Index (CPI) in Poland over the same period, indicating that there is likely to be some price pain for beer drinkers as breweries are looking for ways to offset their costs.

The eToro Beer Index (Simple Weighted Index) is based on current global prices for a basket of six commodities needed to produce and sell beer - wheat, barley, rice, malt, aluminum material (for cans) and gasoline (for transport and agriculture). Since August 20, 2020, the Beer Index has increased by 62%, with the war in Ukraine playing a significant role in the costs currently faced by brewers.

Paweł Majtkowski, eToro market analyst, said:

“The average supermarket price of a 0,5-liter bottle of Żywiec beer has jumped by 2 percent in the last two years. That is almost 28 percentage points above the rise in inflation over the same period. Our Beer Index shows that the gains are not over yet, and further hikes may be ahead of us. Prices can also be influenced by shortages of inputs, such as for example carbon dioxide.

This is a very unfortunate time for a rise in beer prices, because Oktoberfest in Munich it starts in a few weeks, and in November the World Cup with our team starts. Apart from the production price, the excise tax on beer also increases every year, which further intensifies the price increase. So it turns out that one of the biggest winners in this situation will be the budget. The average Pole over the age of 15 drinks 136l of beer a year, on which he spends about PLN 900, of which almost 40 percent. it's taxes. "

Virtually everything is more expensive

Gas - necessary for the production of beer ingredients as well as for its transport - recorded the largest price increase of all items in the beer basket, and its cost jumped by 138%, mainly due to the war in Ukraine and limited oil supplies from Russia.

The costs of barley and malt also rose sharply, by 104% respectively. and 87 percent over the same period, thanks in large part to disruptions caused by the war, with Russia and Ukraine believed to supply as much as 30% of the world barley exports.

Rice is the only commodity on the Beer Index whose price has fallen by 1% in the last two years. from mid-August 2020. It is believed that the stable price of this grain - which is used as an additive in combination with barley malt to lighten the beer - is due to the fact that since 2007, supply has exceeded demand every year, leading to a large stockpile.