Brewers in Italy set new records – in 2019

Italy | Before covid-19 hit, Italy’s brewers were on a roll. 2019 saw beer production increase to 17.5 million hl (+5 percent) over 2018, causing domestic consumption to rise to over 20 million hl (+2.6 percent) and exports go up by 13 percent to over 3.5 million hl, according to AssoBirra, a trade body.

The increase in beer output has boosted the entire sector, including small brewers, whose number is about 850. Collectively they saw a 3.8 percent growth in volumes compared with 2018.

Italy’s microbrewers had hoped to gain from a 40 percent reduction in excise duty for breweries producing less than 10,000 hl beer per year, introduced in the 2019 budget, but the pandemic has prevented them from reaping the full benefit. Take it as an indication of the challenges still faced by microbrewers that their total number has fallen to 850 from a peak of 950 in 2016.

In 2019, Italy also set a new domestic consumption record, exceeding 20 million hl beer, with per capita beer consumption increasing to 34.6 litres from 33.6 litres in the previous year.

Off-premise beer sales have increased

This came on the back of higher beer imports, rising to 7 million hl in 2019. Brewers will bemoan the fact that off-premise consumption has now crept up to 64 percent of total sales, which cannot be good for profits.

These extraordinary results have also resulted in an increase in employment. AssoBirra estimates this has led to the creation of 3,300 extra jobs in an industry that is responsible for 144,000 direct and indirect jobs across the entire supply chain.

To better cope with the pandemic’s impact, which saw Italy under lockdown between 11 March and 3 May, AssoBirra hopes to persuade the government to reduce the excise duties for brewers and financially support the hospitality industry, whose contribution to the beer value chain was EUR 5.7 billion (USD 6.7 billion) out of EUR 9 billion overall.

Hit hard by the covid-19 pandemic

AssoBirra didn’t release sales data for the first half of 2020. It is believed that beer sales were down between 20 percent and 30 percent during the first six months compared with the same period last year.

Insiders say that Heineken was less affected by the decline thanks to its strong presence in the off-premise, while Peroni (owned by Asahi) and privately-owned Forst from northern Italy had to stomach a greater blow.

How the remainder of the year will pan out is anybody’s guess. It will partly depend on how many thirsty tourists will have spent their vacations on Italy’s beaches. Tourism was a EUR 230 billion (USD 272 billion) industry and 13 percent of the nation’s GDP depended on it. By some estimates revenues from tourism could drop by EUR 40 billion (USD 47 billion) this year.