Amid declining sales, leading brewing groups have announced a beer price hike for bars and restaurants in Germany. After Germany’s leading brewing group Radeberger in October said to raise draught beer prices by around EUR 8-9 euros per hectoliter as of March 2020, one and a half weeks ago also Krombacher announced a similar move, followed on Wednesday by Veltins and today also by AB InBev and Warsteiner. It is believed that other major brewing groups like Bitburger, Oettinger and Carlsberg will join soon.
Radeberger Group and the others justify the price increase by pointing to steady cost increases that could no longer be compensated for internally. However, price for bottled and especially canned beer which is mainly sold in discount retail outlets like Aldi and Lidl is exempt from the increase. Market observers believe that a price increase for cans would fail due to the strong purchasing power of the retail chains.
In May 2017, Germany’s leading beer brand Krombacher said it would raise the price of its bottled beer by EUR 6.60 per hectoliter by October 2017. Many other German breweries were expected to follow but were reluctant with announcements. In the end, Krombacher feared to be alone in the market and withdrew the decision in July."We have weighed risks and opportunities and decided to postpone the price increase," said a spokesman of Krombacher at that time (inside.beer, 20.07.2017). Finally, the price hike for bottled beers was executed in March 2018 (inside.beer, 5.10.2017) and most of the breweries followed suit.
At the end of September last year, Krombacher said again it wanted to raise beer prices, this time for canned beer, where Krombacher is market leader with sales of about 500,000 hl of beer in cans. In November, CEO Bernhard Schadeberg and his sales director Stephan Maubach had to cancel again the decision, which would have lifted the price by about 10 cents per 0.5 l can.
German brewers need to compensate declining sales with rising beer prices. Consumers in Germany are increasingly shunning beer, as health concerns, stricter drink-driving policies and general changes in consumption patterns reduce consumption. Beer sales until November 2019 show a decline by 2.5% to 85.2 million hl as can be seen from the latest data from the German Federal Statistical Office.
"Younger people are often together, but not in restaurants, but on smartphones," explains Ulrich Biene, spokesman for Veltins. He expects that the loss in sales for the whole industry will be massive. "We are talking about more than 2.2 million hectoliters. This is to say a large brewery."