'The situation in the brewing industry is dramatic' - DBB evaluates the crisis year 2020 and calls for effective aid

The Corona pandemic in 2020 led to massive losses in the German brewing industry. According to the Federal Statistical Office, a total of 8.7 billion liters of beer were sold in 2020, the lowest volume since the statistics were reformed in 1993. Compared to the previous year, this was a record 5.5 percent drop in sales. "The situation in the brewing industry is dramatic and unprecedented in the post-war period," explained the chief executive of the Deutsche Brauer-Bund, Holger Eichele, in Berlin.

Brewing kettle in a brewery
© Deutscher Brauer-Bund e.V., Brewing kettle in a brewery
04.02.2021
Source:  Company news

The crisis in the brewing industry is far deeper than the latest sales figures suggest at first glance. For according to a survey by the German Brewers Association, breweries suffered a drop in sales of 23 percent on average in the crisis year 2020. "The several-month lockdown of the restaurant industry, the ban on events and the collapse of important foreign markets hit the brewing industry hard," Eichele said. With the lockdowns and the resulting collapse of the draft beer market, breweries had "lost a large part of their economic basis from one day to the next." Merchandise worth millions has already been destroyed, he said. "The larger a brewery's food service and event business, the more devastating the financial losses," he said. While some companies that sell their beers mainly in retail and only to a small extent in the catering trade are coming through the crisis much better, the other businesses are complaining of massive and often existence-threatening drops in sales, which in individual cases amount to up to 70 percent."

According to the German Federal Statistical Office, 82.6 percent of total beer sales in 2020 were for domestic consumption and were taxed. Here, sales also fell by 5.5 percent to 7.2 billion liters. Tax-free - as exports and home brew for brewery employees - 1.5 billion liters of beer were sold, almost six percent less. Looking at exports, 778.2 million liters (-13.1%) went to EU countries and 725.3 million liters (+3.7%) to non-EU countries.

According to the statistics, closed bars and restaurants, canceled festivals and other major events caused a sharp decline in beer sales compared with the same period last year, particularly in April (-17.3%) and May (-13.0%). The summer months saw a slight recovery in the market as a result of relaxed restrictions, but overall restaurant sales remained well below expectations. The renewed tightening of Corona restrictions caused the beer market to slump again from fall 2020. In November alone, 14.1% less beer was sold compared to the same month of the previous year.

Beer sales in Germany have been falling steadily for years. Since 1993 - the year the new version of the Beer Tax Act came into force - the volume of beer sold has fallen by a total of 2.5 billion liters or 22.3%. While per capita consumption of beer in Germany was still 146 liters in 1980, it fell to around 87 liters in 2020. This does not include non-alcoholic beers, which now have a market share of seven percent in Germany.

The Deutsche Brauer-Bund (German Brewers Association), the umbrella organization of the brewing industry, criticized the inadequate aid programs of the federal and state governments in view of the difficult situation of many businesses. It said that far-reaching aid measures had been developed for the catering industry - but that the 1,500 predominantly craft and medium-sized breweries, as those indirectly affected, were left empty-handed, with a few exceptions. "We are talking about businesses that have often been family-owned for generations, that have survived world wars, economic and currency crises - and are now facing the end through no fault of their own, because all reserves have been used up," says Holger Eichele. "From week to week more breweries get into existential distress through no fault of their own. If the federal government and the states do not take targeted and decisive countermeasures here, many breweries are threatened with insolvency. The businesses urgently need help and a perspective." 

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