2011 beer volumes up – but at what price?
How much madder can it get? According to estimates, German brewers have raised beer sales by perhaps 1 percent in 2011 but they paid dearly for the extra volume: by an inflationary use of price promotions.
The trade publication Inside reported on 13 January 2011 that Germany’s top beer brands (Beck’s, Bitburger, Hasseröder, Jever, König, Krombacher, Radeberger, Veltins, Warsteiner and Wernesgrüner) sold about 67 percent of their total annual volume on promotion. That’s up from 60 percent in 2010 and 52 percent in 2009.
Irrespective of their recommended retail prices, these major German beer brands sold on average for EUR 10 (per 10 litres) when on offer. That’s down from EUR 10.31 in 2010 and EUR 10.67 in 2009.
Small wonder that Germany’s major beer brand (in terms of volume sales), the cheap-beer brand Oettinger, has struggled to limit its volume decline to 2 percent to 6.2 million hl.
Inside says that Oettinger is finding it harder and harder to maintain its pricing as some so-called premium beer brands, when on promotion, now cost as little as a crate of Oettinger: that is EUR 7.80 for 10 litres (à 20 0.5 litre bottles).
Ranked second was Krombacher (5.3 million) with slight volume losses, ahead of Bitburger (4.0 million hl/+2.8 percent) and Beck’s (2.7 million hl/+4 percent – Germany only). Warsteiner came fifth (2.7 million hl) with volume losses of 3 percent (-112,000 hl for its Warsteiner Pils brand) while having upped marketing spending to EUR 36 million. Hasseröder, another AB-InBev brand, ranked sixth (2.7 million hl/+10 percent), followed by Veltins, Paulaner, Radeberger and Erdinger (1.7 million hl/+4.4 percent).
Carlsberg’s German brand Holsten only ranked 16th, having lost 15.5 percent of its volume (or 175,000 hl) and falling to merely 950,000 hl, says Inside. Of its Carlsberg brand, the Danes sold an estimated 150,000 hl (+6 percent) in Germany.
As if the general beer price dumping was not bad enough, Germany’s small brewers felt compelled at the end of last year to complain about the increasing use of branded bottles by the big brewers. In their complaint they did not mince words, probably angered by the fact that in October 2011, yet another big brand, the AB-InBev brand Hasseröder, which is often priced as a budget beer, had been given a total of 100 million new branded 0.5 litre bottles to replace the generic beer bottle still used by many brewers.
Given that German brewers are compelled by law to use re-fillable bottles, small brewers increasingly find that what they get back from the beer bottle pool are all kinds of branded bottles – but not the generic ones they need. Sorting out the branded bottles costs them a lot of money, especially if they farm out this job.
In a letter dated 19 December 2011, the Association of Private Breweries fumed that the big guys have bid their adieu to the ecologically and economically sensible generic beer bottle. This they called not only an act of "anti-solidarity", they also saw it for what it is: another weapon by the big brewing groups to force the little guys out of the market.
Oh dear. What will the new year bring for German brewers apart from even more acrimonious accusations?
