It may seem strange, that a natural fuel can have such a bizarre effect on a nation’s favourite drink – strangely enough, this is exactly what’s happening in Germany.
The story begins in Bavaria – one of the most famous beer-loving regions in Germany. The area has 615 breweries and gave Germany its famous beer purity law, dating back to 1516. In its current form, the law permits only four ingredients: malted grain, hops, yeast and water to be used to brew the beer. However, it is only one of these that is causing a real stir.
In the past two years, the price of barley has soared by more than 40 percent, to around 385 Euro per tonne from around 270 euros a tonne two years ago, according to the Bavarian Brewers’ Association. Farmers are planting crops such as rapeseed and corn that can be turned into ethanol or bio-diesel – a fuel made from vegetable oil.
The German government subsidises biofuel crops at the rate of 45 euros per hectare and therefore some farmers see it as a better alternative to growing barley, which traditionally has not yielded high profits.
This is not good news for Germany’s beer lovers “people expect it to be as inexpensive as other basic staples like eggs, bread and milk,” said Erdmann, director of the family-owned Ayinger brewery. The hike in price is straining smaller, family owned breweries, that cannot afford to pay the increase.
For many, the price fluctuations in Germany will echo what happened in Mexico, when increased demand for corn to make ethanol in the United States pushed up the price of tortillas.
Last week, the United Nations tried to phase down enthusiasm over biofuels, pointing out that the diversion of land to grow crops for fuel will increase prices for basic food commodities.