Kirin to Raise Beer Prices on Raw Material Costs

Japanese brewer Kirin Holdings said on Wednesday it will raise the prices of beer for the first time in more than 17 years starting in February, citing a sharp rise in aluminum and malt prices.

The move is the latest in a string of price hikes by Japanese food makers, who have been forced to pass on soaring costs of grain and other raw materials after keeping prices steady through years of deflation.

Imported malt prices have more than doubled from a year earlier, while aluminum has jumped nearly 30 percent, Kirin said.

"We are expecting some 8 billion yen ($70 million) of cost hikes for raw materials this year, and for next year we expect raw material prices to rise more than 15 percent compared with 2006," a Kirin spokeswoman said.

The company said it will raise prices of all its beer products from Feb. 1. It declined to specify the size of the hike, saying retailers will determine retail prices, but a company source said consumers are likely to see store prices rise by 3 percent to 5 percent.

Rivals are seen likely to follow suit. Asahi Breweries, which runs neck-and-neck with Kirin for the title of Japan's top beer maker, said it has no plans to raise prices for now.

But Asahi President Hitoshi Ogita said at a recent news conference that the company might have to consider raising prices if its cost-cutting efforts cannot absorb rising material costs.

Japan's dependence on farm produce from abroad -- 61 percent of its food on calorie basis is imported -- means higher world prices of commodities such as corn, wheat and soybeans are, in theory, passed through to retail food and beverage prices.

Orange juice prices have already risen this year for the first time in several years on tight global supplies.

Prices of mayonnaise and vegetable oil have increased for the first time in 15 years, as growing biofuel production helped drive prices of soybeans and other oilseeds higher.

Earlier this month, Yamazaki Baking, Japan's No. 1 bread maker, said it would raise the prices of most of its bakery products from December because of higher flour, edible oil and packaging costs.