Beer prices could be on the rise as conflict mounts in the East

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Published: Mar. 1, 2022 at 3:34 PM CST
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SIOUX FALLS, S.D. (Dakota News Now) - The price of beer might be going up due to the conflict in Eastern Europe.

Ukraine has supported countries across the globe serving as a supplier of grain, including barley, which is a key ingredient in many beers.

However, now that the country is under attack, Ukraine is pulling its support inwards, protecting the homeland.

Matt Hastad, co-founder of Remedy Brewing Company in Sioux Falls says, right now, barley costs anywhere from 50 cents to $1.20 per pound, and could soon be on the rise if Ukraine stops exporting its goods.

This is one of a long list of hurdles local breweries have had to face in recent years. The rise in the overall cost of production has also taken a toll on Hastad’s local business.

“Everything from packaging to raw ingredients, to shipping costs, across the board, everything has raised,” Hastad said.

The conflict in Ukraine is just the latest cause for concern.

“If you’re a local brewery you obviously use barley, hops, and maybe some other grains as well in the brewing process, and so whenever that supply chain is disrupted, expect to see things like higher prices and lower supplies,” South Dakota Retailers Association Executive Director Nathan Sanderson said.

While large operations may be able to absorb these costs, local breweries try to find solutions before they bear the financial burden.

Currently, Remedy, as well as at least one other local brewery Dakota News Now spoke with, does not get their product from overseas. Nonetheless, it’s something Hastad will keep a close eye on moving forward.

“We’re pretty lucky, North Dakota, Montana, even Canada, have some pretty extensive barley production,” Hastad said.

Sanderson says the conflict in Ukraine and the nature of the global supply chain demonstrates that there are “real advantages” to purchasing locally sourced goods.

Ultimately, any jump in future costs could be passed along to consumers. But, Hastad says Remedy is trying to stifle that increase.

“It is something we talk about, is this something that’s coming down the pipeline? Are we going to raise prices? We’re doing everything we can not too, but even the big guys are talking about potential prices increases, so, as of now, we haven’t had to and we’re hoping we don’t have to, but we’ll see what happens,” Hastad said.

Hastad tells me, 20% of the world’s beer is made from Ukrainian barley. Companies across the globe including America may need to find alternative sources to fuel their production.

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