Malt price increases after brewers announce new tariff


Assela Malt Factory has increased malt price two days after Ethiopian breweries announced a price increase in their products.
The malt factory stated that ‘the shortage of local barely supply and stiff competition for obtaining malt barley’ led to the price increase. “Due to this problem, currently the cost of local malt barely has increased tremendously at an alarming rate which has inflated our cost of production,” a letter issued to breweries on Wednesday January 24 explained.
The letter went on to say that sustaining the current malt price when other input prices were rising at an alarming rate was too difficult, so the factory is forced to increase the price of malt they supply to breweries.
According to a study submitted to the Trade Competition and Consumer Protection Authority by the breweries, who formed an association in September 2017, the price of local malt in 2016 was 18 birr per kg. That price went up to 21 birr in 2017 and the latest Assela Malt price adjustment means that a kg of malt will rise to 24.00 birr or 2,400 birr per quintal starting from next week.
A source said that the breweries submitted their study about the rising cost of production about four months ago and discussed with the Trade Competition and Consumer Protection Authority a proposal to revise their price on bottled and glass beer supply.
The last price increment made by breweries was in May 2016. According to sources from the breweries, the significant inputs’ price increase forced them to readjust their final products’ rate. For instance they say, the price of glue, which is used for labeling, had increased by 14.8 percent compared with its cost in 2016; while prices of caustic soda (32%), labels (28%), cork (26.5%), imported malt (24.5%), and gas oil (11.2%) have increased respectively.
As of Monday January 22 the price of bottled and glass beer officially increased throughout the country.
Meanwhile, Assela Malt Factory is advertised to be privatized.