Hop Harvest Havoc – Beer Bills Bounce

Economics, yo

Economics, yo

Last year, Europe saw a lovely dry, hot summer. It’s what we all dream for and, in England, usually experience all of three crappy Thursdays a year. But alas, dry hot paradise weather is not always a good thing. In fact, it has wreaked havoc across the European hop farms and given us a pretty poor harvest this year. Poor harvests means less supply, less supply means higher demand, and for all of those who remember A-Level Business Studies elasticity of supply and demand you’ll know that means a price increase. As demonstrated in a nifty graph here by SparkNotes (remember them?! They taught me Macbeth!)

Craft Brewers forced to raise prices

The hop shortage means that brewers now have to pay increased premiums for the hops. This means their fixed costs are higher. This means the beer is sold to pubs, bottleshops and bars at a higher price. This means us, the beer loving public, have to pay more for beer. It’s a pretty terrible thing all-round really.

According to Sky News:

Germany’s harvest fell by 27% last year, according to the International Hop Growers’ Convention.

Sharp declines were also recorded in other European producers such as the Czech Republic and Slovenia.

“There has been a considerable tightening of supplies on the European hop market after the major reduction in the 2015 harvest with a sharp increase in prices,” said Stephan Barth from the Germany-based global hop merchant the Barth Haas Group.

“Europe will need at least an average harvest in 2016 otherwise we could see serious supply shortages,” he added.

 

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