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Brewers powerless amidst Guinness grain price protests

By Neil Merrett , 13-Aug-2008
Last updated on 13-Aug-2008 at 16:30 GMT2008-08-13T16:30:46Z

The Guinness brewery in Dublin is used to dealing with large numbers of tourists on a daily basis, though was yesterday inundated with grain farmers angry over the company’s payments for their grains.

About 400 farmers gathered outside the famous St James's gate plant to demonstrate concerns over the current payments for malting barley, despite brewing industry claims that it has little influence on farm prices.

Like a number of agricultural industries, grain producers within both the baked and brewery sectors are facing increasing production costs in getting their products to market, which in turn is affecting end of line manufacturers.

Protests

A spokesperson for the Irish Farm Association (IFA), which was involved in the protest, told BeverageDaily.com that despite a sharp rise in energy and fertilizer costs for barley producers, there was not adequate support for the industry.

Estimates provided by the association suggest that 5,000 malting barley farmers had gone out of business in the country over the last ten years due to payments being received for their crops.

The IFA claims that Guinness’ parent company Diageo itself was procuring the malt crops from agricultural supplier Greencore.

However, with Diageo accounting for 80 per cent of the country’s malting barley use, the body claimed that the brewer must to do more to ensure a sustainable supply of the crops in the country.

“Guinness continues to use the nationally symbolic harp as a selling tool and must therefore help protect Irish interests where possible,” state the spokesperson.

Brewer concerns

However, industry body, The Brewers of Europe, said that the issue was out of the hands of brewers and that ensuring that beer can remain competitive in terms of product price and supply payments was a ‘difficult balance’.

Secretary general Rodolphe de Looz-Corswarem said that consumer and retailer pressure in particularly was requiring the industry to produce beers at the best possible price, amidst competition from other beverage products, putting brewers themselves under financial strain as well.

“Larger brewers in particular do not often buy grains directly from farmers, but from companies, making it difficult for them to affect the situation,” he stated. “I am not sure directly as to what the solution can be, and political discussion may be required.

De Looz-Corswarem claims that the grain price problem had been exacerbated in recent years by the EU’s decision to cut down on subsidized grain production, particularly in relation to the level of regulation present in the wine industry.

However, grain costs were not the only major concern for the current cost of beer formulation, according to de Looz-Corswarem.

“About 90 per cent of the content of beer is made from water, which has also become increasingly expensive to supply,” he stated.

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