The fires which have swept across drought-stricken Russia this summer are finally dying down, but the smoke lingers in some surprising places – such as the local pubs.

About one-third of Russia's wheat crop was destroyed in the last month as wildfires burned across farms and forests in the country's agricultural heartland, driving grain prices higher around the world.

Wheat prices have gone up 50% since June, because of the drought and fires, while barley – one of the four key ingredients in beer – has more than doubled.

Russia reacted to the crisis by banning grain exports as of last week. Ukraine, the world's largest barley producer, with more than a third of the global market, is slapping quotas on grain sales, too. These moves – and the expectation that Kazakhstan may soon follow suit – are keeping prices at near-record highs.

All of this is bad news for beer drinkers, who can expect the price of a pint to go up before too long. It's worse news for pubs, which have already been struggling in a tough recession as people are going out less and drinking at home more.

"The consumer is very challenged at the moment, with tax increases and pay cuts, so people are very reluctant to spend already," said Donal O'Keeffe, chief executive of the Licensed Vintners Association, which represents Dublin pubs. "Price visibility is very important at the moment. The customer wants stability."

O'Keeffe said drinks companies – rather than publicans – had more control over prices. He also said the government had a role to play.

"We'll be seeking further reductions in excise tax," he said. "We welcome the last reduction but still have extremely high taxation which is affecting competitiveness."

The Drinks Industry Group of Ireland reported in June that pub sales were off by 14.6% in the first five months of the year. Although off-sales got a 7.5% boost in the same period because of a cut in excise tax in the last budget, pubs remained under pressure.

According to the Vintners Federation of Ireland, which represents pubs outside of Dublin, about 20,000 jobs have been lost in the pub industry during the recession.

The value and viability of pubs could also be at stake if prices at the till rise, said John Ryan, director of property group CB Richard Ellis.

"Pubs have traditionally been valued on the basis of turnover, which is under pressure," he said.

"A price rise will put pressure on financing if margins come under threat."

Drinks companies are also feeling the effects. Last week, beermaker Carlsberg doubled its full-year profit forecast after encouraging first-half results, but the market sensed trouble on the horizon. The company's share price fell 5% early in the month on concern that barley, wheat and other ingredients to make beer would rise, forcing the company to increase prices. Shares later rebounded following the results.

Commodity fluctuations "will not have any material impact on the group next year", chief executive Joergen Buhl Rasmussen told analysts last week. But he would not discuss how much barley the company had hedged, saying only it was sufficient to "give us comfort".

Diageo, makers of Guinness and more than 100 whiskies, including Bushmills, also suffered a big share-price drop in early August over grain prices fears. Unlike Carlsberg, the stock has yet to recover. Diageo delivers its annual results on Thursday.

"Diageo is obviously aware of the price fluctuations," said a company spokeswoman. "We are still negotiating with Irish farmers for the 2010 harvest, but the outcome will obviously have an impact on prices going forward."

Diageo buys 90% of its malted barley from Irish farmers through a third-party supplier, Brewmalt Greencore. Price talks are ongoing and are expected to conclude in the next two months.

Analysts were optimistic last week regarding the prospects for drinks companies, however, including C&C, which owns Tennent's, due to expected recoveries in beer sales volumes in the UK, western Europe and, ironically, Russia.

"Carlsberg… signalled an improving tone and outlook for the UK saying that beer volumes in northern and western Europe grew slightly organically and that its UK business continues to improve," said Paul Meade of NCB.

Diageo's results this week should give more of an indication of where the broader market is going, but the Irish economy remains weak. Moreover, the effect of high grain prices has not yet filtered through to prices either at the pub or the off-licence.

Grain prices did begin to retreat from their peaks last week as the Ukraine government clarified its quota levels. It remains to be seen what the new baseline for barley is, however.

As beer prices react, pubs will have to find a way to cope.