Beer lovers face higher prices as hops shortage looms

A worldwide shortage of hops— a key beer-making ingredient— could have a big effect on the taste of specialty brews and force smaller microbreweries to hike the price of their products.

The shortage can be blamed on a perfect storm of events— bad weather in hop-growing areas of the United States, Europe and Australia anda depressed U.S. dollar.

Brian Titus, president of Halifax's Garrison Brewing Company, said his brewmaster isn't sure he'll be able to make some of his beers in the new year because he hasn't been able to find some varieties of hops at all.

"It's bordering on disastrous actually. If you don't have hops then you don't have beer," said Titus.

A decade-long oversupply of hops that had forced farmers to abandon the crop is finally gone and harvests were down this year. In the United States, where one-fourth of the world's hops are grown, acreage fell 30 per cent between 1995 and 2006.

Australia endured its worst drought on record. Hail storms across Europe damaged crops. Extreme heat in the western U.S. hurt both yields and quality.

Prices for the remaining supply of hops have doubled in recent weeks.

With the low American dollar, European and Asian brewers are snapping up the remaining worldwide supply of hops.

Breweries are rethinking their brews

The shortage has some breweries rethinking their brews and possibly changing beer recipes to cut down on the use of hops.

"So maybe you find something that smells similar but doesn't have the same taste profile and it doesn't have the same bitterness," said Titus.

Industry analysts speculate the shortage could force smaller breweries to hike the price of some beers by as much as 10 per cent.

Larger breweries are less likely to have to raise prices because they buy in bulk with long-term contracts.

Craft brewers don't have the means to hedge against rising prices, like their industrial rivals.