News & Observer | newsobserver.com | Biofuel boom pushes up prices for Germans' beer

Published: May 31, 2007 12:00 AM
Modified: May 31, 2007 02:43 AM

Biofuel boom pushes up prices for Germans' beer

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AYING, GERMANY - Like most Germans, brewer Helmut Erdmann is all for the fight against global warming. Unless, that is, it drives up the price of his beer.

And that is exactly what is happening to Erdmann and other German brewers as farmers abandon barley -- the raw material for the national beverage -- to plant other, subsidized crops for sale as environmentally friendly biofuels.

"Beer prices are a very emotional issue in Germany -- people expect it to be as inexpensive as other basic staples like eggs, bread and milk," said Erdmann, director of the family-owned Ayinger brewery in Aying.

"With the current spike in barley prices, we won't be able to avoid a price increase of our beer any longer," Erdmann said.

In the past two years, the price of barley has doubled to $271 a ton as farmers plant more crops such as rapeseed and corn that can be turned into ethanol or biodiesel, a fuel made from vegetable oil.

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 about 385 euros or $522 a ton, from about 270 euros 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.

Talk about higher beer prices has not gone unnoticed by consumers. Sitting at a long wooden table under leafy chestnut trees at the Prater, one of Berlin's biggest beer gardens, Volker Glutsch, 37, complained bitterly.

"It's absolutely outrageous that beer is getting even more expensive," Glutsch said, gulping down the last swig of his half-liter dark beer at lunch. "But there's nothing we can do about it -- except drinking less, and that's not going to happen."

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