Germany: “The situation in the brewing industry is dramatic”

According to figures published today by the German Federal Statistical Office, the corona crisis wiped out more than a third of the turnover of hotels, pubs and restaurants last year. Compared to the preceding year 2019 the decrease amounted to 36.6%, price-adjusted the decrease would have been even 39%. In December 2020 hotels, restaurants and caterers achieved 70.8% less turnover than a year earlier. At unchanged prices the minus was even 72.3%.

The effects are also clearly visible in beer sales. According to the statistics, closed bars and restaurants, canceled parties and other major events led to a sharp decline in beer sales compared to the same period of the previous year, particularly in April (-17.3%) and May (-13.0%). In the summer months, there was a slight recovery in the market due to the loosened restrictions, but overall catering sales remained well below expectations. The again tightened Corona requirements caused the beer market to collapse again from autumn 2020. In November alone, 14.1% less beer was sold than in the same month last year.

A total of 87 million hectoliters of beer were sold in 2020, the lowest level since the statistics reform in 1993. Compared to the previous year, this was a record drop of 5.5 percent. "The situation in the brewing industry is dramatic and unprecedented in the post-war period," said the chief executive of the German Brewers' Association, Holger Eichele, in Berlin.

According to the Federal Statistical Office, 82.6 percent of the total beer sales in 2020 were intended for domestic consumption and were taxed. Sales fell here by 5.5 percent to 72 million hectoliters. Tax-free sales – this is mainly exported beer but also free beer which is given to brewery employees – amounted to 15 billion hectoliters of beer, nearly six percent less than in the previous year. Looking at exports, 7,78 million hectoliters (-13.1%) were shipped to EU countries and 7.25 million hectoliters (+3.7%) to non-EU countries.

The crisis in the brewing industry is far deeper than the sales figures suggest at first glance. According to a survey by the German Brewers' Association, the breweries suffered an average sales decrease of 23 percent in the crisis year 2020. "The lockdown of catering for several months, the ban on events and the collapse of important foreign markets hit the brewing industry hard," said Eichele.

“With the lockdowns and the resulting collapse of the draft beer market, breweries “lost a large part of their economic basis from one day to the next”. Goods worth millions have already been destroyed.

The larger a brewery's catering and event business, the more devastating the financial losses. Those companies that predominantly sell their beers in the trade sector, are mastering the crisis much better. The others complain about massive and often existence-threatening slumps in sales, which in individual cases amount to up to 70 percent.

Beer sales in Germany have been falling continuously for years. Since 1993 - the year the new version of the Beer Tax Act came into force - the amount of beer sold has decreased by a total of 25 million hectoliters or 22.3%. While the per capita consumption of beer in Germany in 1980 was 146 liters, it fell to around 87 liters in 2020. Not included are alcohol-free beers, which meanwhile have a market share of seven percent in Germany.

The German Brewers' Association, as the umbrella organization for the brewing industry, criticized the inadequate federal and state aid programs in view of the difficult situation facing many companies. Far-reaching aid measures had been developed for the catering industry - the 1,500 mostly artisanal and medium-sized breweries, that were indirectly affected, however, with a few exceptions, did not received anything.

"We are talking about companies that have often been family-owned for generations, that have survived the world wars, economic and currency crises - and are now facing extinction without any fault of their own because all financial reserves have been used up," said Holger Eichele. “From week to week, more breweries find themselves in dire straits through no fault of their own. If the federal and state governments do not take targeted and decisive countermeasures, many breweries are threatened with bankruptcy. The companies urgently need help and a perspective. "

Share this article: