E-Malt.com News article: Germany: Pandemic crisis mainly affecting small breweries

Without parties, bars, restaurants, festivals or beer gardens, beer consumption plummets in Germany. Crisis caused by a pandemic mainly affects small breweries, which may not recover. In Germany, the current season is ideal for going to a beer garden: the temperatures are pleasant, very sunny, and the Bundesliga is heading towards the final stage, Explica reported on April 18.

Or rather, it would be on its way – were it not for the social isolation measures imposed due to the new coronavirus. Because of them, the Bundesliga has stopped, and biergartens, like restaurants and bars, are closed.

The entire German bar and restaurant sector feels the effects, as well as the country’s 1,500 breweries. Many of them are threatened to close permanently because of the crisis.

According to the industry association, DBB, mainly small breweries owe a large part of their revenue to the supply of beer to restaurants and bars. In some cases, orders from these establishments account for up to 90% of sales.

Moritz Fiege, a traditional and medium-sized brewery in the city of Bochum, is one of those that are feeling the effects of the crisis. Last year, the brewery produced 130 thousand hectoliters. It supplies around 300 establishments in its region.

With the closure of restaurants and bars, the supply of beer by the barrel (the most popular in Germany) has plummeted. It accounts for 20% of Moritz Fiege’s revenue. In addition, the city team, Bochum, is no longer playing, and therefore there is no more beer sales at the stadium.

The brewery plans to reduce the working hours of 12 of its 80 employees in the coming days. The company’s president, Hugo Fiege, predicts that the exceptional situation will still last, and that the establishments will only slowly return to normal.

But not only the small ones, the big breweries also face difficulties. This is the case of Veltins, a family company in Meschede-Grevenstein, or the best-selling brand in the country, Krombacher, from Kreuztal, which produced 6 million hectolitres last year.

“Restaurant sales are practically nonexistent anymore,” says Krombacher spokesman Peter Lemm. Bars and restaurants account for about 15% of the company’s sales.

Renowned brands such as Krombacher and Veltins also have an additional source of income, which small breweries do not usually have: exports. In the case of Krombacher, this sector accounted for 5% of sales last year. “But here, too, revenue has plummeted to almost zero,” laments Lemm.

Famous German brands are much appreciated abroad. Therefore, the consequences of the current situation cannot be ignored. Italy, with 3.4 million hectolitres, and China, with 1.8 million hectolitres, are the main markets, according to the numbers for 2019. According to DBB, at the moment, almost everything is stopped in sales abroad.

And then there are rock festivals and traditional festivals from north to south – all cancelled. As well as weddings, weddings and other family celebrations. The breweries had to go through several cancellations of orders. The hardest hit here are the approximately 1,100 small regional brands, with an annual production capacity of less than 5,000 hectolitres.

Bavarian Governor Markus Söder has already signaled that even Munich’s Oktoberfest may not take place this year.

Rising temperatures signal the start of the barbecue grill season, a national craze in Germany and one that always raises beer sales. But this year, the outlook is not encouraging.

“If nobody can meet friends, there is no reason to celebrate or to consume beer,” sums up Marc-Oliver Huhnholz, of DBB. “The next few days will show how much people will still consume at home and how much will be completely lost.”

Inside the house, however, less beer is drunk, despite the quarantine.


19 April, 2020