RISING HOPS & MALT PRICES IN INDIA WORRY BEER COMPANIES

The making of beer is turning out to be costlier as the domestic industry grapples with steep increases in the prices of raw materialslike hops and malt.

Most of the Indian brewers which imports hops, have absorbed the cost instead of passing them on to the customers. A major fire at a hops storage facility in the US late last year and poor crop in the Czech Republic, one of the biggest producers, had more than doubled the price of hops at its peak.

The price has, over the last one year, increased from 16-22 euros a kg from a low of 9 euros.

Most of the beer is made from hops, malted barley, water and yeast. Hops are added to beer to give it a bitter taste, aroma and flavour.

The shortage of malt has also lead to increase in prices to around Rs. 17000 a tonne from Rs. 9000. The shortage is also because of increase in beer consumption, which grew 30 percent last year. While the malt capacity has not grown, the beer consumption has grown 30 percent.

For some of the key brewers in India, during the first nine months of the fiscal year F06-F07, cost of production has grown by 55 percent.