High cost pressure burdens the German brewing industry

German breweries are confronted with massive cost increases. According to an analysis by the German Brewers' Association (DBB), in addition to the cost of gas and electricity, brewing malt and packaging materials in particular have recently become drastically more expensive. Carbonic acid, the price of which had almost doubled in the meantime, was at times no longer available on the market at all, so that individual companies in the beverage industry had to stop production in 2022. Here, however, the situation has eased considerably.

High cost pressure burdens the German brewing industry
© Deutscher Brauer-Bund e.V. - DBB
Source:  Company news

"Inflation is putting the economy under high pressure. We have to expect costs to remain at a high level in 2023 and in some cases to rise further," says DBB General Manager Holger Eichele. The continuing high cost pressure is the biggest challenge for the brewing industry in the new year, he said, alongside maintaining a secure and affordable energy supply. Above all, sharply rising costs for raw materials and preliminary products as well as personnel and logistics are burdening the companies. This will also have an impact on prices, according to the DBB's forecast. Numerous breweries in Germany are facing an extremely difficult business year and have already announced price increases for 2023.

According to the assessment of the German Brewers' Association, the industry has proven to be extremely resilient in the past years and has been able to successfully hold its ground in the crises overall. "Many breweries have been able to use the experience gained from the Corona crisis, even if the dimensions are incomparably greater today," says Eichele. "We have been working in a permanent crisis mode for almost three years now. Cost increases and unexpected bottlenecks in the supply chains have accompanied us since the beginning of the pandemic. Russia's invasion of Ukraine, which is against international law, has exacerbated the problems even more. Today, however, the brewing industry is much more resilient than before."

For the months of January to November 2022, the German brewing industry's sales of 81.2 million hectolitres of beer (excluding non-alcoholic varieties) represent an increase of 3.2 per cent compared to the crisis year 2021. This is only a positive signal at first glance, because in the pre-Corona year 2019, beer sales in the comparable period had still been 85.2 million hectolitres. The beer sales figures for the full year 2022 will be published by the Federal Statistical Office at the beginning of February.

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