Germany: Veltins Brewery refunds millions of euros to its draft beer clients

In order to help keg beer partners which are affected by pub closures as a result of the coronavirus outbreak, Veltins Brewery has announced to reimburse its clients 60% of the value of the goods of their last keg beer delivery. The repayment of several million euros is “to make a veritable contribution in order to be able to start again after the crisis without having to forego the inventory,” the brewery said in a press statement on Friday.

"We want to help our long-standing partners to cope with the tight liquidity situation,” said Veltins General Manager Michael Huber. "We want to send a clearly noticeable signal that we will make it easier for beverage wholesalers to stay on course in heavy seas."

With an output share of 17% in the past financial year, Veltins brewery is one of the bigger breweries in the HoReCa sector in Germany and serves 14,750 pubs, bars and restaurants. Last year, the family-owned brewery from Meschede in North Rhine-Westphalia has sold more than 3 million hectoliters of beer and achieved sales of EUR 359 million (USD 400m).

After most countries including Germany decided in the last weeks to shut down public life in order to avoid spreading the coronavirus, gastronomic outlets had to close, and the sale of beer in kegs has come to a standstill. Beer wholesalers which sell beer in kegs, and the owners and operators of outlets that sell draft beer suffer from severe sales declines and the potential risk of bankruptcy. In addition, depending on the duration of the shutdown, pubs, bars and restaurants are running the risk that the best-before date of their beer on stock is expiring.

Due to a price increase in early March, draft beer warehouses in most of Germany are well stocked by both restaurateurs and wholesalers. It is estimated, that both have piled up stocks of keg beer for a consumption of up to four weeks.

With its announcement, Veltins also puts an end to the discussion whether to take back draft beer which was delivered in the weeks before the coronavirus outbreak. Other breweries are expected to follow soon with similar announcements.

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