With the new year many beer companies are struggling with lukewarm sales and tighter profit margins than in boom times. However, many companies are seeking to raise prices by as much as 25% in this bad economy, hoping to jockey into higher profit margins. But this presents a huge threat to the very weak economy overall, as well as a severe risk to any economic recovery.
In Oregon, for example, many fine craft beers such as Deschutes, Full Sail, Widmer and others flourish as popular local favorites. However, huge new year inflation will hit many of these craft beer brands very hard as prices shoot up not a dime or two, but as much as 25% for some brands. In many cases a six pack may increase a dollar or more on the shelf for consumers.
Another serious area of wild grocery product inflation is milk prices. Since just July, there have been as many as four, count 'em four, wholesale price increases for milk. Now, in some cases, a gallon of milk may sell for as much as one dollar more than it did during the summer. Yet unemployment is high, consumers have less money to spend, yet inflation is quickly devaluing any money that people may have. It's a very serious economic threat.
Normally, during bad economic times prices actually fall. The real estate market is a prime example of that. In cities such as Detroit, Michigan some home prices have dropped to as low as $5000, which is an absurd level of bad economy devaluation. During the Great Depression for example, the typical 78rpm record sold for $1.00 in those days. However, as the economy worsened, record companies that wanted to remain in business dropped the price of a 78rpm down to just 10cents by using cheaper materials such as shellac and rag content in the production of records.
However, the idea of dramatic price increases right in the middle of a deep recession is a bizarre notion and one that could seriously ruin any economic recovery for the nation. And unfortunately, beer prices might be leading other products just like lemmings into raising prices as well. And the economic recovery will only suffer for it.