The price isn’t right

On 23 April the Managing Director of the Bavarian Brewers’ Association, Lothar Ebbertz called Mr Burgard’s proposal “dishonest” as it raised expectations which could not be fulfilled. There was no scope for lowering beer prices, Mr Ebbertz said, given that raw materials and energy still added a significant chunk to brewery costs.

What is more, only recently brewers and brewery workers had agreed on a wage increase of 3 percent.

Mr Ebbertz added that Mr Burgard’s suggestion gave out the wrong signal to consumers, namely that the price of beer did not reflect on the beer’s quality. If the price of beer were lowered, Mr Ebbertz argued, consumers would be led to believe that the relation between quality and price was endlessly elastic.

However, while Germany’s official brewing bodies engage each other in a public spat, national brewers Veltins, Bitburger and Warsteiner cut prices for their premium beers in order to remain competitive.

Although premium beers should sell for EUR 13.50 or more per 20 x 0.5 litre crates, many brands are currently selling for EUR 10.99. Officially called “special offers”, many of these offers are likely to turn permanent, thus underlining Mr Burgard’s statement that beer prices would have to drop.

Now whether Germany’s brewers can afford to sell their premium brands in the standard price band – that is an altogether different question.