Plummeting German beer sales reach a new low mark
Germany's beer industry is grappling with a difficult year, as consumers cut back on spending and the economy struggles to recover from a prolonged downturn. According to the German Brewers' Federation, alcoholic beer sales dropped by 6.3% from January to June 2021, amounting to 3.9 billion litres, and domestic sales decreased by 6.1% year-on-year to 3.2 billion litres.
Holger Eichele, head of the German Brewers' Federation, predicts 2022 to be an "extremely demanding year" for the industry. Eichele attributes these challenges to consumers' spending habits, but does not mention tariffs or changing tastes as factors affecting beer sales in this context.
The decline in beer sales could also be attributed to an ageing population and changing tastes in Germany. Despite the growth in popularity of non-alcoholic beers, they are not included in the sales figures mentioned.
German beer exporters have faced additional challenges, including geopolitical risks, tariffs, and shifts in consumer spending. Tariffs, such as those imposed by President Donald Trump on the major US market, have driven up export costs and reduced competitiveness abroad. While some companies can pass tariffs on to consumers, many face demand elasticity limits that prevent this, leading to lost market share in tough global markets.
The German hospitality industry has also experienced significant downturns due to rising operating costs and inflation, leading to reduced beer consumption at foodservice outlets and restaurants. This weak domestic environment can constrain production scale and export capacity.
German beer producers also face intense competition, both from large-scale global brands and the growing craft beer market. High production costs further complicate profitability for exporters.
The combined effect of tariffs driving up export costs, weaker consumer spending reducing demand, and competitive pressures create a challenging environment for German beer exporters as of 2021. This is the lowest beer sales figure since 1993, according to the federal statistics agency Destatis, marking a significant decline for the industry.
As geopolitical risks intensify, causing increased uncertainty for exporters, the industry must adapt to these challenges to ensure a sustainable future. The specific beer sales figures for July to December 2021 are not yet available.
- Holger Eichele, anticipating another challenging year for the German beer industry, warns that export costs could escalate due to tariffs, making it even harder for domestic brewers to compete globally.
- The German hospitality industry's struggles with operating costs and inflation have led to lower beer consumption at restaurants and foodservice outlets, negatively impacting the sales of both alcoholic and non-alcoholicbeers within the domain of on-premise consumption.
