Expect Beer Prices to Rise Significantly Due to Supply Chain Issues

Cans of beer in cooler with ice
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If you see your favorite beer on sale, you may want to grab an extra six-pack, because according to one major brewer, prices are going up. The supply chain issues that affected cars and electronics are now coming for beer. In fact, if the price is right, you may want to pick up a case. According to Dolf van den Brink, the CEO of Heineken, increases on prices may be big.

“These kind of price increases and inflation, I think we have not seen in a generation,” Dolf van den Brink told Reuters this week.

While Heineken sold 5 percent more beer last year, the brewer says the cost of making beer is increasing due to a number of reasons. The cost of barley is twice the price it was in 2021, while aluminum has gone up by 50 percent, according to Heineken. In addition, the brewer reports increased costs for energy and shipping. The larger costs for the brewer will affect the prices that customers are seeing at stores.

“In my 24 years in the business I’ve never seen anything like it, not even close,” Van den Brink told the Financial Times. “Across the board we are faced with crazy increases.”

Will Inflation Impact Small Craft Brewers?

The big brewers aren’t alone in the current uncertain economic landscape. Toward the end of 2021, Ball Corporation, the largest can manufacturer in the U.S. announced changes affecting smaller craft brewers.

Ball’s new policy would change minimum orders of cans for non-contract customers from one truckload to five. That’s an increase from around 200,000 cans to a million. In addition, Ball will no longer offer warehouse space. So not only do small brewers have to order one million cans, they need someplace to put them.

As the Brewer’s Association, a trade organization for the beer industry pointed out, many craft brewers had turned heavily to cans during the COVID-19 pandemic, as tasting rooms, bars, and restaurants closed. It was the one way they could get product out to their customers. In fact, the Brewer’s Association estimates that cans make up 60 percents of craft beer output.

The Ball policy change, which was set to begin January 1, faces opposition. After a request for a delay by the Brewer’s Association and Senator Ron Wyden from the craft brewing hub of Oregon, Ball postponed the start of the policy until March 1 to allow brewers to find alternative sources for cans.

Whether you’re drinking a green-bottled lager from one of the largest brewers in the world or a can of hoppy IPA from your local craft brewery, know that you may be paying more in the coming days.

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