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Brewer Adnams warns rocketing barley costs due to war in Ukraine will push up beer prices

Brewer Adnams warns rocketing barley costs due to war in Ukraine will push up beer prices 2

The price of a pint of beer is set to soar by Christmas as the price of barley has been pushed up by Russia’s invasion of Ukraine.

Roughly around a fifth of the global exports of barley come from Ukraine and prices for the key brewing ingredient have surged worldwide since war broke out in February.

The increase has prompted a warning from Suffolk-based brewer Adnams who has said customers should expect pint prices to go up later this year.

Fergus Fitzgerald, of Adnams, told the Sunday Telegraph: ‘When it comes to that next supply, that’s when we will start to see price increases.

‘The price of barley currently is around 30 per cent higher than it would have been this time last year.’

It is the latest blow to British households in the midst of the worst cost of living crisis the country has seen in decades, created by soaring inflation, energy bills and fuel prices.

Beer brewer Adnams (pictured) has warned that the price of a pint of beer is set to soar by Christmas as the price of barley has been pushed up by Russia's invasion of Ukraine

Beer brewer Adnams (pictured) has warned that the price of a pint of beer is set to soar by Christmas as the price of barley has been pushed up by Russia’s invasion of Ukraine

Ukraine supplies just under a fifth of the world's barley but the war has pushed up global prices

Ukraine supplies just under a fifth of the world’s barley but the war has pushed up global prices

Households have also seen a rise in national insurance and increased bills for some mobile and TV packages, contributing the squeeze on families’ expenses. 

The government’s own watchdog has predicted that this year will see the biggest fall in disposable incomes since records began in the 1950s.

Sunflower oil shortage could impact global pesto supply 

Pasta fans are set to be hit by the war in Ukraine with a global shortage of pesto that could send prices rocketing.

The tangy sauce is traditionally made from sunflower oil which is supplied mainly from both Ukraine and Russia and either unavailable or much more expensive as a result of the conflict.

It could mean foodies having to cope with pesto made from alternatives such as olive oil which is up to four times more expensive and is also not as mass produced as sunflower oil. 

Sunflower producers have warned manufacturers that they may not be able to fulfil contracts or be able to do so at the agreed rates because of the war counting as a ‘force majeure’ – an extraordinary event beyond their control that frees them of their contractual obligations.

Luciano Chiumiento, sales director of brand Clas Pesto, said: ‘They are saying “ok you are under contract but because of the war we cannot guarantee the price or the supply”.’

He admitted their ‘technicians’ were looking for alternatives but while global production of sunflower oil is around 22 million tonnes a year, olive oil production is around just three million tonnes a year.

Walter Zanre, CEO of Filippo Berio, told The Grocer there is ‘a huge cost implication as olive oil costs approximately four times sunflower oil.

‘There is also real concern that there is insufficient refined olive oil available to meet the demands of the pesto industry.’

Nick Henderson, of the Belazu brand, said they were still getting sunflower oil but also sourcing European grown rapeseed oil.

He added: ‘However, this has come at a price, with our latest contracts costing up to 65% more than our previous sunflower oil, with global prices remaining very volatile.’

The Food Standards Agency has relaxed labelling rules to allow pesto jars to switch from sunflower oil to rapeseed oil without changing oil.

Mr Fitzgerald told the Telegraph that even if the war in Ukraine was resolved, the price of barley was unlikely to drop for some time.

He added: ‘Probably the third quarter and the fourth quarter, that’s when we’ll see more of this coming through, and if you’re dealing with a 25 per cent to 30 per cent increase in costs, then you have to pass some of that on to customers.

Adnams, which sources its barley from the UK and has 70 pubs, is not the only brewer and operator to warn of rising costs. 

Last week, fellow brewer Marston’s reportedly confirmed they would be hiking prices of their pints due to ‘soaring energy prices and operating costs’. 

The company, which has more than 1,500 pubs, said prices would be going up by as much as 45p in some parts of the UK. 

A Marston’s spokesman told the Express: ‘The price increase is a direct impact of the soaring energy prices and operating costs as being experienced by all businesses and households across the country.’

Meanwhile, the latest product to be impacted by the war in Ukraine could be pesto as the sauce is traditionally made from sunflower oil sourced from Ukraine and Russia.

But the conflict has meant the key ingredient is either unavailable or now very expensive.

Sunflower producers have warned manufacturers that they may not be able to fulfil contracts or be able to do so at the agreed rates because of the war counting as a ‘force majeure’ – an extraordinary event beyond their control that frees them of their contractual obligations. 

It comes as the Institute for Fiscal Studies warned that Britons face years of austerity alongside the cost-of-living squeeze after Chancellor Rishi Sunak failed to boost spending on services to match spiralling inflation.

The think tank said that Sunak’s package of tax cuts and rebates ‘is not enough to offset the fall in real earnings that we expect to see’.

Compounding the cost of living crisis is the face that the energy price cap is set to rise by £693 from the start of April next Thursday from £1,277 to about £1,970 per year and is expected to increase again in October, adding to pressure on already-squeezed household finances.

The regulator Ofgem said pre-payment customers will see an increase of £708 from £1,309 to £2,017.

Meanwhile the average annual grocery bill is expected to rise by £180 this year, according to the consultants Kantar which tracked a 3.8 per cent rise at the start of this year compared to the same period last year.

And Government figures show the average price of petrol has gone up by more than 55 per cent in less than two years – with the average tank of fuel now costing almost £90, which is up by about £33 on May 2020.

Brewer Adnams warns rocketing barley costs due to war in Ukraine will push up beer prices 3

Prices of basic food items in the UK could soar by as much as 50 per cent as a result of the conflict in Ukraine. The double-whammy of problems facing farmers and producers could translate to prices

Prices of basic food items in the UK could soar by as much as 50 per cent as a result of the conflict in Ukraine. The double-whammy of problems facing farmers and producers could translate to prices

On top of that, shoppers could see the price of clothing soar as fuel costs and a drought in America is causing the cost of cotton to hit record levels.

Last week, the Associated Press reported that the cost of the fibre was at its highest since 2011, hitting $1.3171 or £1 per pound of cotton.

The increase in costs for traders is likely to be passed onto consumers, adding to already boosted prices with women’s clothing in the UK up by 12 per cent last month. 

In addition, the Office for Budget Responsibility predicts inflation will now average 7.4 per cent this year and could reach 8.7 per cent in the fourth quarter of 2022 – the highest level for 40 years.

Rising energy, goods and food prices have already pushed inflation to increase of 6.2 per cent in the 12 months to February – a 30-year high.

The Government is also pressing ahead with a 1.25 percentage point rise in national insurance, although Mr Sunak said the basic rate of income tax will be trimmed by a penny in the pound in April 2024, delivering a £5billion cut.

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