Does Euro:USD exchange rate affect import beer prices much?

If the dollar keeps tanking won't the prices of those imported beers cost more dollars to buy?

OTOH, I think Bud might be a good bargain in Europe.

 

You have the tanking backwards. The Euro has gone from 1.45 to 1.25 in the last year.

 

FYI...

The US economy has been governed into a serious mess, so our gov't has seen fit to greatly devalue the dollar to make our exports looks attractive to foreign buyers...almost like sticking a bandaid over a crack in Hoover Dam.

If a good European brewer does not change his price and the US keeps devaluing the dollar it's going to take more dollars to buy that $15 bottle of Evil Twin, IOW the buyer of Evil Twin in the US is experiencing "commodity" inflation.

So the US consumer sees a price hike each time the dollar is devalued, that's without any change in the number of Euros charged by the Scandanavians for Evil Twin. If they decide to jack up the price on their end then then the American consumer gets hit with commodity and price inflation.

 

You want the Australian dollar.
One cent higher than the US dollar.

 

The thing is, American beer still tends to be just as or more expensive than European beers.

Let's also not forget that the European economy is in a mess too.

 

I was posting relative to the dollar, not relative to the Euro.

That bottle of foreign beer may be cheaper than it was previously but the US buyer is still experiencing commodity inflation due to the ER.

 

You won't get any argument from me.

 

You cant look at value like that. The Euro was created at 1.19 dollars.

I could create a currency that is worth $2. And peg it to the $2 dollar bill. Thus 1 Unito will always be worth more than the dollar. Heck, I could create a unit of currency, lets call it the goldo, that is backed by 1 oz of gold per unit. A goldo will be worth ~1600 times a dollar and will never* fall below parity. Its the relative movement that counts. If gold fell to ~800/oz, the goldo would be weak vs the dollar, despite still being worth WAY more.

The Euro is slightly up from its creation, so over the last 13 years, it has been stronger than the dollar. But it was pushing 1.6 in 2008, so the last 4 years have been ugly for the Euro.

*I think its safe to say that gold will never trade for less than $1 per ounce.

 

Im not sure what you mean by that. Currencies are comparative. The prices I quoted for the Euro is in dollars. Tanking is always relative to each other (or some other currency). But as we are talking about prices in the US, relative to the dollar is what makes since. The dollar may be tanking, but then the Euro is tanking harder.

 

Lol at the convoluted logic implying that the exchange rate has no affect on prices.

When anyone (including the importer) is buying the product from a euro country, the 1.22 exchange rate makes the beer "cheaper" in terms of USD. Whether the importer passes those savings down the line is a seperate issue.

 

I'd like to bring this back to the OP's question and not speculate on currency trading.

It's certainly true in wine that the relative currency's affect the price of wines being imported from Europe, but it's not a direct or immediate impact. It really has to do as to the price that the importer can get for any given vintage, which can vary based on when they are buying (futures versus actual product) and how much. For beer, the importer is presumably buying more continuously (for non-vintage stuff) so there's not a whole lot of product at one price versus another. They then decide what to sell it for in the US and could just take more profit or pass the savings along. I would guess they mostly keep their prices stable over the short term and just gain or lose more depending on the currency.

So my short answer / educated guess is that currency changes would have little to no impact on a month to month basis but could have some impact longer term. Of course, if you order directly from Europe you could take advantage of it yourself.

 

how does ordering directly help?

 

As a homebrewer, it does help bring down the cost of European grain and hops. You have to wait for a while, as the supply timeline is long.

 

Meaning...regardless of the ER dropping from say 1.4:1 to 1.2:1 the US buyer is still sinking more $s into the transaction than if the ER was 1:1. Sure, the dollar strengthening has helped out the US buyer recently but still overall he's "losing".

 

No he is not "losing", there is no presumption of parity between the two currencies. There is no reason to assume that the exchange rate should be 1:1 if the currencies were equally strong. There basis is different.

Only relative changes matter. The dollar is stronger vs the euro than it was a year ago or 3 years ago, but weaker than it was 10 years ago, and only slightly weaker than when the euro started in 1999.