The head of Danish brewer Royal Unibrew has warned that rising commodity costs will continue to be a major issue for brewers around the world going forward.

Speaking exclusively to just-drinks today (8 January), Poul Moeller, Unibrew's CEO, highlighted increases in raw material prices as the main reason for the proposed closure of one of its breweries in Denmark, announced this week.

"The brewing industry has seen the prices of raw materials increase in the last one-and-a-half years," Moeller said. "The prices of aluminium and malt have led to the unsatisfactory performance in the first three-quarters of last year (for Unibrew)."

Looking ahead, Moeller conceded that cost pressures would continue to make their presence felt in 2008. "We expect costs to continue to rise," he said. "The prices of grain, yeast and glass all look set to continue to increase."

Earlier this week, Unibrew said it has begun talks with employees at its Aarhus brewery in Denmark, with a view to closing the facility towards the end of this year. "Discussions with employees in Aarhus have begun today," Moeller added. "We need to increase capacity at our other two breweries in Denmark before we can close Aarhus." The brewery is expected to cease production in the fourth quarter of 2008.

The announcement came days after Unibrew confirmed its acquisiton of Latvia's Livu Alus brewery. "This purchase is a clear indication of the positive prospects on offer in the Baltic states," Moeller said.