Beer drinkers in Australia face price increases of at least 5% this year as the drought in many parts of the country pushes up barley prices.

Beer prices have stayed stable in the last 12 months after huge increases following the introduction of a new sales tax two years ago.

But barley costs are expected to rise up to 40% this year after a 30% in the crop in Queensland and Victoria. East Coast beer makers are now buying barley from West Australia, which is also pushing up transport costs.

The drought has devastated the wheat and barley crops across Australia and conditions are not expected to improve until the winter.