E-Malt.com News article: Luxembourg: Beer production down 6.5% in 2014

Beer production in Luxembourg fell by 6.5 percent from 2013 to 2014 and sales also dropped 4 percent, Luxemburger Wort reported on February 25.

According to latest figures, 18,000 fewer hectolitres of beer were brewed in the Grand Duchy last year.

While this could be a sign of an increasingly competitive market, it is worthy to note that total sales also dropped to 338,000 litres, a phenomenon for which brewers are blaming the smoking ban introduced in Luxembourg on January 1, 2014.

"This damn law ..." Managing Director of Brasserie national Georges Lentz said on February 24, adding: "The position of our house was to say it was not for the state to direct but every cafe should decide (on whether to ban smoking on its premises).”

The industry was helped somewhat by an outdoor beer festival hosted in Place Guillaume II during World Cup screenings. However, wet weather in August saw many consumers turn away from the refreshing summery tipple.

The brewery collective has a glass half-empty outlook for the months to come. Results for 2015 are expected to worsen thanks to the VAT increase on alcohol from 3 to 17 percent.

Luxembourg counts seven breweries, of which six are family owned and one, Diekirch, is owned by InBev. Bofferding and Battin beer sales reached 158,200 hectolitres, down 600 hectolitres from the year before. Before taxes, net income amounted to 4.62 million euros (compared with 4.85 million euros in 2013).

Preserving its market share (60% in Luxembourg), the group has invested 450,000 euros in a new empty bottle inspection system.

Furthermore, it invested 2.3 million euros as part of its 250th anniversary activities to restore the brewery building to how it looked in 1930, and construct a new visitor centre.

Munhowen, the subsidiary responsible for marketing and administration, has sold more than 387,000 hectolitres for a turnover of 68 million euros, an increase of nearly a million and a profit before tax of 5.3 million euros.

Everywhere around Luxembourg, the economic situation does not provide hope for beer manufacturers.

An increase in excise duty of 160% in France has limited beer consumption and the situation is no better in Belgium or Germany, where production capacity is 40% too high. "Contrary to popular belief, the consumer is not drinking more because of the crisis," Mr Lentz said, adding: "We drink more often at home and in smaller amounts."

But the collective has a strategy – to offer consumers what they want, at different times of the day, in different circumstances.

Bofferding Director General Frédéric De Radigues is personally involved in developing new products, such as Triple.

"In the US, Budweiser has lost 30% of its sales by not being able to renew itself. We need to be much more in tune with our customers. Our results are good, an increase of 50% per year for four years. There is a demand!"

For the remaining brewers, Battin's statistics, driven by the new range of products, leave them some hope. For now, however, the target will be non-Luxembourg nationals resident in the country.

“But to reach 156 different nationalities and communicate with them, it's very complicated,” Mr Lentz said, adding: “Our Portuguese friends are very attached to the Portuguese beers, the Danes to Carlsberg, for example, and we must be able to convince them that our products are of good quality."

The company is also making efforts to expand its market share beyond the Greater Region. Compared with the 400,000 litres sold in Luxembourg, the 20 million litres sold in France and 8 million in Belgium suggest there is potential in these two countries. The GDP in this area, 335 billion euros, is also promising.

In 2014, 2,928 bars, cafés and restaurants sold products from Luxembourg's Brasserie national, of which 650 were in the Greater Region and 66 were new joiners. Furthermore, beer sales outside of the Grand Duchy tripled to 35,000 hectolitres in the past 10 years.


25 February, 2015