The price of beer will rise because of the US' move into ethanol from corn, according to Today's Financial Times which contains a story about Jean-François van Boxmeer, chief executive of Heineken, a Dutch brewer, he warned last week
that the expansion of the biofuel sector was causing a "structural shift" in agricultural markets.
One consequence could be a long-term rise in the price of beer, the FT warns because. Barley and hops account for 7-8 per cent of brewing costs.
That story is lurking behind a subscription wall, but there's something similar about Heineken, and the price of beer on Associated Content.
In sterling terms the price of a pint of wallop has gone up from 63p when I started buying pints of Marston's Pedigree bitter (a good 25 years ago) to close to £3 in the trendy bars on Sutton High Street, where I work. That's an annual rise of around 6.5% without corn being diverted into ethanol driving the price of alternative grains up.
This is, as I've said before, good news for growers and bad news for everyone else. I find that I'm forced to agree with the Radioactive Communist Zombies blog that should cellulosic ethanol take off then Senators, and Representatives from the corn belt will be hollerin' for
protection in the form of either higher subsidies for corn-based ethanol, or taxes on cellulosic based.
So should the market set supply and demand or should governments skew demand and supply...