Germany: Brewery Giant Bitburger Retreats, Beer Price Hike Put on Hold

Germany has consistently maintained some of the lowest beer prices globally, attributed to intense competition among breweries and the influential position of the retail sector in the food industry, which resists price hikes. As a result, the success of beer price increases relies on the collective participation of key market players.

This challenge has recently been felt by the Bitburger Brewery Group, one of Germany's largest brewery conglomerates. Following the October announcement by German beer market leader Radebeger Group of a price hike ranging from three to 6.70 euros per hectoliter for bottled beer and an average of five euros/hl for barrel beer effective February 1, the Bitburger Group swiftly followed suit.

However, when Pilsner market leader Krombacher, and subsequently Warsteiner and Veltins, indicated to major customers that they would abstain from a price increase despite acknowledged cost pressures, the Bitburger Group faced a potential setback. Implementing a price increase without the participation of competitors could have resulted in the loss of up to 10% of the brewery group's sales. Consequently, for pragmatic reasons, the recently expanded management, now including Marketing and Sales Director Sebastian Holtz (formerly Executive Vice President - Western Europe at Carlsberg Group), opted to retract the planned price increase.

In a letter addressed to customers, the brewery group communicated that the previously announced price hike scheduled for February 1 will be temporarily suspended until further notice.

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