Coronavirus pandemic creates crisis for German brewers
Germany | The covid-19 pandemic will have a massive impact on the German brewing industry. According to an industry survey, conducted by the German Brewers Association (DBB), beer sales dropped 16 percent in the first half of 2020, while turnover declined 18 percent over the same period last year.
For the full year 2020, the member breweries of the DBB expect sales to decrease by at least 14 percent and turnover to drop by 16 percent.
However, the more breweries depend on sales to the on-premise and festivals, the greater the economic damage. In some companies, volume sales are 70 percent below last year’s levels. Breweries, which mainly sell their beer in the off-premise and have benefited from domestic tourism over the summer months, are in a much better position to survive the crisis, the DBB reported in September.
Federal and state aid is insufficient
Although the government has set up various support programmes to see companies through the crisis, more than half of the breweries polled (54 percent) said they want more help from the federal and state governments. Only a quarter (25 percent) said the government’s support was sufficient.
Support schemes for medium-sized firms amounted to EUR 25 billion (USD 29 billion), but by September, only EUR 1 billion had been applied for. Firms complained that bureaucratic hurdles had been set too high. The government retorted that this was meant to prevent fraud.
Many respondents to the DBB’s survey said they want the reduced VAT rates to be extended beyond the 31 December 2020 deadline, and beer excise payments deferred until the end of the pandemic.
Breweries are calling upon the state governments to make patio service possible for hospitality venues in the autumn and winter. This a not so subtle hint to revoke the ban on patio heaters.
DBB fears a wave of bankruptcies
“The survey underlines that 2020 is one of the most difficult years in the history of the German brewing industry,” Jörg Lehmann, President of the German Brewers’ Federation, said. Even though sales to the off-premise are on the mend and beer exports are beginning to pick up again, draught beer sales remain at rock bottom. “Covid-19 restrictions in the on-premise and the cancellation of tens of thousands of festivals and events are hitting the breweries directly,” Mr Lehmann commented. The hard times aren’t over yet, he added.
