August 10, 201015 yr £4 a pint and rising bread prices: The cost of Europe's crop failures By Daily Mail Reporter Last updated at 3:18 PM on 10th August 2010 Comments (59) Add to My Stories The price of a pint of beer will cost pub-goers more The price of a pint of beer could soar to £4 as a result of poor barley harvests in Eastern Europe and rises in VAT and tax on alcohol. And bakery chain Greggs is warning of higher bread prices because drought has devastated Russia's wheat crop. The cost of animal-feed quality barley has more than doubled in two months to €210 (£175) a tonne. But as brewers usually buy barley up to 18 months in advance, the higher prices will not be felt until next year. The average cost of a pint of draught lager rose to £2.81 last year, according to the Office for National Statistics figures analysed by the British Beer & Pub Assocation. VAT will increase in January by 2.5 per cent, and duty is expected to rise two per cent plus inflation under the beer duty escalator. Meanwhile Newcastle-based Greggs said it expected an increase in 'ingredient cost' after severe droughts in Russia triggered a jump in wheat prices. But chief executive Ken McMeikan said the group believed the increase in wheat prices was an 'over-reaction' to events in Russia, which has banned all grain exports until December 31. The company expected wheat prices to be around £120 per tonne, but it was currently trading between £158 and £170 per tonne. 'Our view is that there has been an over-reaction, and we would hope prices would come back down,' Mr McMeikan added.
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