COVID brews up trouble for German beer industry

first_imgMüller-Späth also speculated that craft beer may be associated with a different lifestyle than traditional beer, arguably catering more to health-conscious, affluent consumers who are not deterred by higher prices as long as the beer is considered special. Sales of the country’s national beverage fell 5.5 percent last year to 8.7 billion liters, according to government statistics, the lowest annual volume in nearly 30 years. Holger Eichele of the German Brewers Association also said that shifting health and fitness attitudes have had an impact on the beer industry, accounting for some of Germany’s steady decrease in consumption in recent decades even before the pandemic. “In 1980 there was an average consumption per head of 146 liters per year. Last year it was down to 87 liters,” he said. “The small increase in retail sales can’t make up for the damage caused by the closure of restaurants and the ban on events,” said Holger Eichele, managing director of the German Brewers Association. “Also, sales in the catering trade have a significantly higher added value than sales in retail.” Amid the uncertainties of the lockdown, many brewers are slashing production. Hofbräuhaus said it plans to cut its volume by 20 percent this year. While brewers aren’t alone in suffering under the lockdown, Eichele said that they are not being treated as generously by the government as other industries. “Pressure and stress in the working world have also increased,” Eichele added, noting that while people were going out for beers on Sunday evenings 20 years ago, “today many stay at home to watch television and drink ginger tea.” “In 2019, a total of 1.8 million liters of beer were consumed at the Hofbräuhaus, compared to 450,000 last year,” said Stefan Hempl, the brewery’s spokesman. “Of course we were also massively affected,” said Carl-Eugen zu Oettingen-Wallerstein, owner of the Fürst Wallerstein brewery near Nördlingen, Bavaria. His firm draws on a long tradition of beermaking under his aristocratic ancestors — Oettingen-Wallerstein still uses the title “prince” — and has around 100 employees. “Millions of euros worth of beer are being destroyed. It was just dumped down the drain. And there is no fixed-cost reimbursement for that. Meanwhile, the fashion industry, which thinks it has to throw away its collections — although sweaters don’t have an expiration date — gets a fixed-cost refund,” he said. Big Beer’s body blow This article is part of POLITICO’s premium policy service: Pro Agriculture and Food. From food safety to animal disease, pesticides and more, our specialized journalists keep you on top of the topics driving the agriculture policy agenda. Email [email protected] for a complimentary trial. That may make good business sense now, but should Germans rediscover their love of beer as lockdowns ease over the summer, the country’s brewers may face a new challenge — a surge in demand. “The slump in the catering industry also hit us hard,” said Fried-Heye Allers, a spokesman for Anheuser-Busch InBev, the world’s largest brewer, with a stable of brands that in Germany includes Beck’s, Franziskaner and Spaten. According to the association, there are more than 1,500 breweries in Germany, the vast majority of which are small and local. Such breweries, many of them centuries old, have been hit particularly hard. Thanks to COVID, Germans now have no choice. “I’ve already talked to the tent hosts and the breweries. They are working on the basis of a June deadline for a decision. I think that makes sense,” Reiter told local media last month. The stereotype of the beer-swilling German is often overdone. Germans’ beer consumption has declined substantially in recent decades. But they remain among the world’s keenest beer drinkers — only Czechs and Austrians drink more per capita. Trouble is, beer is best served by draught and enjoyed in groups. Edgy beers edging up Asked how the brewer has been dealing with tenants who are feeling the full force of lockdowns as many can’t sell any beer or food at their restaurants, Hempl said they introduced a “no revenue, no rent” policy to protect them. In some cases, forbearances on payments have also been granted, he said. Munich’s many other beer-related venues have remained dormant, including the tourists’ favorite Hofbräuhaus, a large beer hall in the city center run by the Hofbräu brewery, a business owned by the Bavarian state. Also founded in Munich, but centuries younger and considerably smaller than Hofbräu, craft beer brewery Tilmans Biere has had a different experience with the pandemic. “Keg beer practically stopped being a thing for us suddenly during the lockdown, as kegs are almost exclusively ordered by bars and restaurants,” said spokeswoman Frederike Müller-Späth. MUNICH — Germans have discovered an alarming COVID-19 side effect: a loss of taste for beer. Munich mayor Dieter Reiter has put off a decision on whether to cancel this year’s Oktoberfest after last year’s cancellation — the first time such a drastic step was necessary since World War II. Though unavoidable for public health reasons, the decision left a gaping hole in the city’s calendar and caused enormous revenue losses for brewers, beer tent hosts, retailers and hoteliers alike. In Munich, home to the world’s most famous beer gardens, not to mention the annual Oktoberfest, the coronavirus has challenged the entire city’s way of life. “People have a different relationship to craft beer. It’s is also definitely more expensive,” she said, adding: “It somewhat plays into this pleasure thing where people treat themselves to something special with exclusive explanations [from experts about how the beer is made] and exclusive tasting events.” Be he noted some bright spots for the business. “In retail, we were able to close the year with sales that exceeded expectations,” he said. He added that despite the pandemic, Anheuser-Busch InBev still had a positive outlook for 2021, as it is planning to introduce a range of innovations, noting a “growing demand for natural, original products.” “We managed pretty well, actually. We got a beer courier up and running in Munich and then we basically drove beer out with rickshaws and that went super well,” she said. “Perhaps we can also react more quickly than a large brewery when it comes to demand shifts.” The cancellation of the local festivals the brewery used to supply has been a particular drag on demand, Oettingen-Wallerstein explained. Germany’s brewing giants are suffering too. The closure of bars, restaurants and beer gardens is largely to blame. Though Germans are drinking more bottled beer at home, it’s not nearly enough to compensate for the overall slump. “Interestingly, though, demand for kegs by private individuals went up a little in the summer, with people asking for party barrels,” she said, noting that their smallest barrel on offer contains 30 liters. last_img