£4 pint on horizon

Wednesday 11th Aug 2010 by theWeather Club

When Harold Wilson was prime minister the nation's drinkers were scandalised when taxes on alcohol pushed the price of beer up to the dizzying heights of 15p a pint. Outraged as they were by these spiralling prices, the concept of the £4 pound pint would have seemed impossible - something from some scriptwriter's nightmare vision of the future. But it appears this staggering possibility has become all too real.

The problem is that the price of barley used in brewing has seen dramatic recent increases. The heat waves and heavy rains seen across Europe this summer have led to lower harvests and the inevitable upward pressure on prices this creates. These rises are such that even the lower grade animal feed barley has doubled in price in the last two months. Add to this the import restrictions announced Russia in the past week and there is a real fear that this squeeze in the supply of the brewers main raw material, will drive prices up even further.

Brewers buy their grain about 18 months in advance so the higher prices shouldn't hit bars across the country in the immediate future. But with the VAT 2.5% increase to be factored in, and the annual rise in alcohol duty of 2% plus inflation waiting in next years budget, the prospect of a pint of beer passing the £4 mark in 2011 is a real possibility.