Local breweries are set to introduce price adjustments to their products due to price hikes to inputs, Capital has learnt.
Draft and bottled beers, two of the most consumed beer types in Ethiopia, have seen one of the sharpest price increases this week.
“The time has come to make upward adjustments in the prices in the face of the recent currency devaluation and fuel price surge that affected the production cost,” said sources. According to sources from the breweries, the significant inputs’ price increase forced them to re-adjust their final products’ rate.
This price adjustment on beer products is the second one in two years. The least price adjustment made by breweries was a year ago which the Ministry of Trade made them to restore the adjustment. A year ago in 2020, breweries adjusted prices following the amendment of excise tax law in the country. The excise tax reintroduced in 2020 levies 40 percent tax on beverages with alcoholic content of less than seven percent. The alternative for this is 11 birr per liter, which will be implemented if it is higher than the 40 percent calculated amount.
BGI Ethiopia, the bottler of St. George, one of the highly consumed beers in the country has already adjusted its price this week, attributing the change to a price surge in raw materials. Officials from BGI’s factories speaking anonymously said that the existing market price of inputs, especially the increasing malt price, has forced the factory to increase price on its products. Currently, BGI’s crate of beer sales at 600 birr up from 500 birr, and similarly the company is selling its barrel of draft beer for about 1660 birr which was selling by 1360 birr few days ago, also showing a significant increase, according to sources.
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