Aldi prevents brewer Krombacher from hiking its price
Germany | Read and weep. Krombacher is one of Germany’s most popular pils brands. Since May 2017, Krombacher in cans has been available at Aldi. This must have boosted Krombacher’s sales. But at a price.
According to the German trade publication Lebensmittelzeitung, Krombacher wanted to raise prices for its cans as of January 2020. The price hike – EUR 0.05 – would have pushed the retail price of a 500 ml can up to EUR 0.84 (USD 0.93).
It is believed that Aldi disagreed with the increase, forcing Krombacher to ditch the plan in November 2019. It has said as much in a letter to its wholesalers.
Has Aldi put pressure on Krombacher?
Industry rumour has it that the discount chain threatened Krombacher with a de-listing. Because of its clout, Aldi is in a better position than others to negotiate prices and veto planned price increases.
Currently, a can of Krombacher costs EUR 0.79 (USD 0.87). At this price level, Krombacher does not make a huge profit. If you deduct VAT (19 percent), Aldi’s margin (say 25 percent), logistics costs (2.5 cents), excise (4.5 cents), the cost of packaging (11 cents), Krombacher is left with 41.8 cents: for raw materials, production, filling and its own profits.
At the end of the day, Krombacher’s marginal income on a 500 ml can of beer may amount to just EUR 0.30. This is a generous estimate as you can buy beer in cans in German supermarkets for as little as EUR 0.29 (USD 0.32) per can.
Beer prices: volumes over margins
Still, canned beer is one of the major sales drivers for German brewers. Whereas a 10 litre crate of beer (20 bottles) retails at EUR 14.80 (USD 16.39) excluding deposit, 20 cans of pils cost EUR 15.80 (USD 17.50).
For the beer crate, an additional EUR 3.10 in deposit is due. For the cans, the deposit is EUR 5.00.
If you think those pieces low, you have not heard the latest. During the second week of November, Aldi’s rival Netto sold a crate of Krombacher in bottles for EUR 10.40 (USD 11.52) plus deposit. The supermarket chain Kaufland lured shoppers with a rock bottom offer for Warsteiner pils. A crate was priced at EUR 10.00.
