Durst Malz, the German subsidiary of the French group Soufflet Malt (InVivo), has announced the closure of its facility in Castrop-Rauxel, Germany, citing a lack of competitiveness in the current market environment. This decision reflects ongoing challenges in the malting industry, including stagnant demand and market consolidation.
In recent years, the industry has seen significant mergers and acquisitions, such as the acquisition of the family-owned Groupe Soufflet by the French agricultural cooperative InVivo for approximately EUR 2.3 billion. Additionally, Soufflet Malt (InVivo) recently acquired United Malt Group (UMG), further solidifying its position as the world's largest malting group (inside.beer, 08.12.2023). This trend has led to increased competition and pressure on smaller malting operations. The closure of the German plant underscores the difficulties faced by malting companies in maintaining profitability amid these industry shifts.
Reports suggest that other international agricultural corporations are also evaluating the adjustment of their malting production in Germany to rebalance supply and demand. It is reported that currently negotiations are going on with trade unions to introduce short-time work in another German malting plant.
The primary cause of the crisis s the persistent decline in German beer consumption, coupled with difficulties in exporting German beer, particularly to China and Russia. Since 2018, sales of alcoholic beer in Germany have fallen from 94 million hectoliters to 82.6 million hectoliters last year.(inside.beer, 3.2.205). The decline of 11.4 million hectoliters of Reinheitsgebot-compliant beer corresponds to a malt production reduction of approximately 180,000 tons—more than three times the annual capacity of the Castrop-Rauxel plant that is now set to close.
If the German malting industry cannot increase its exports significantly, further adjustments will likely be necessary, increasing the probability of additional plant closures. However, this issue is not confined to Germany; similar market conditions are affecting other European countries with comparable consumption patterns.
