BRANDON, Man. – Trouble is brewing: Canadian companies that make malt and beer are angry about a recent price hike for malting barley.
On July 13, the price for six-row barley jumped by $21 to $218 per tonne, while two-row barley prices rose $29 to $233 per tonne.
Margo Dewar, vice-president of the Brewers Association of Canada, said it’s an “understatement” to say brewers are angry.
“The brewers have absolutely no choice in terms of source of supply. There’s no competitive market, there’s no access to any other sources,” Dewar said.
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“And there was no consultation, there was no warning, and as far as the brewers can see, there’s no justification for the increase in terms of cost of production or anything else.”
A spokesperson for the Canadian Wheat Board said that brewers shouldn’t feel singled out. Deborah Harri said barley prices are based on the Minneapolis market. Because old-crop supply is tight, prices will be high until new crop supplies are available, she said.
“That’s really what’s fuelling the higher prices at this point in time,” Harri said.
Industry representatives said the price difference of $15 per tonne between six-row and two-row is particularly hard to swallow.
“I can tell you it’s not going down real easy with the domestic brewer,” said Jack Tye of Canada Malting.
Molson Breweries uses only two-row barley for its beer, while Labatt uses equal parts of both types of barley. Tye said the price jump could push brewers to change their recipes.
“Brewers don’t change varieties very easily or very rapidly, so these external forces may be forcing them into that decision a lot quicker than they might otherwise want,” Tye said.
Dewar said that brewers like to use two-row because they can get more beer out of it.
Jim Anderson of Molson Breweries said his company and Labatt Breweries are lobbying the Canadian Wheat Board to lower their prices to domestic buyers.
“Not as a threat and not having any authority to say ‘yea’ or ‘nay’ what we’re going to do, I would foresee that … Canadian brewers would switch back to six-row,” he said, adding that consumers would not likely notice a change in flavor.
Harri said that two-row prices are higher because there has been a greater demand for two-row on the world market.
Dewar said brewers were to meet this week to discuss what to do. She could not comment on whether the price of beer would be affected.
