German Biofuels Incentives Drive Up the Price of Beer
We've noted on a number of occasions that the recent worldwide biofuels push could have a range of unintended consequences, from higher food prices to greater deforestation. In Germany, recent subsidies for biofuel crops have had an effect of the price of a dietary staple: beer. According to the Associated Press, many German farmers are now growing crops like rapeseed and corn rather than barley, and that shift is being felt at the tap:
In the last two years, the price of barley has doubled to euro200 (US$271) from euro102 per ton as farmers plant more crops such as rapeseed and corn that can be turned into ethanol or bio-diesel, a fuel made from vegetable oil.The AP also notes that last year's barley harvest was smaller than usual, so German beer drinkers are getting hit with a double whammy.
As a result, the price for the key ingredient in beer -- barley malt, or barley that has been allowed to germinate -- has soared by more than 40 percent, to around euro385 (US$522) per ton from around euro270 a ton two years ago, according to the Bavarian Brewers' Association.
For Germany's beer drinkers that is scary news: their beloved beverage -- often dubbed 'liquid bread' because it is a basic ingredient of many Germans' daily diet -- is getting more expensive. While some breweries have already raised prices, many others will follow later this year, brewers say.
While it's tempting to write this off as a minor inconvenience, rising barley prices are also threatening the livelihood of many smaller German brewers: "The financial pressure on Germany's small and medium-sized breweries is immense," brewers association head Walter Koenig said. "The increasing costs of raw materials may become a serious threat for many breweries."
We've already seen protests over higher tortilla prices in Mexico; could mass action over beer prices in Germany be next? In each case, an item central to the culture's diet is threatened by the economics of biofuels. ::ENN
Image source: BBC/AP