Can Germany’s small breweries survive the coronavirus shutdown?

Can Germany's small breweries survive the coronavirus shutdown?
A bar worker with beer at a restaurant in Garmisch-Partenkirchen, Bavaria, last year. Photo: DPA
Beer is a massive part of German culture - particularly in Bavaria. But the shutdown is hitting small breweries hard.

Like many sectors, Germany's beer industry has been hit hard by the pandemic, with sales down around 4.1 percent.

But while large breweries are profiting from increased sales in the food retail trade due to people buying a lot in supermarkets, smaller beer producers are struggling to survive.

Last year most beer festivals like Oktoberfest in Munich as well as smaller ones were cancelled – but that's only the tip of the iceberg as bar and restaurant closures have hit these breweries the hardest.

Above all, the many smaller beer producers who do not have a retail presence need pubs, bars and public festivals to survive.

Georg Schneider, President of the Bavarian Brewers' Association, told local broadcaster BR24: “If there is no turnover but the costs are there, you simply have a business problem.”

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Breweries as collateral damage of hospitality closure

According to the brewers' association, about 30 percent of Bavarian beer is sold in restaurants, bars, cafes and clubs. 

As these places have been closed for months and no beer is being sold, the association fears a wave of upcoming bankruptcies in the beer industry. Adding to the problem is that Bavarian beer sales have also declined abroad.

In 2020,10 percent less beer was exported abroad than in the previous year.

But it's not just about financial losses and businesses staying afloat: there are also fears about damages to the image of the southern state.

“With the loss of beer culture,” warns Schneider, “Bavaria also loses a part of its tourist significance.”

Beer is a huge part of life in Bavaria. In fact, if Bavaria was to become a separate country, it would have the world's highest beer consumption, we wrote in 2019.

READ ALSO: How Bavaria fears coronavirus surge during parties to replace Oktoberfest

According to officials, Bavaria has a pro capita beer consumption that is approximately 40 percent above the national average.

Meanwhile, 40 percent of all the EU's breweries are reportedly situated in Bavaria.

Call for support

The Bavaria Brewers' Association has urged Germany to allow smaller beer producers to pay a reduced tax rate.

In addition to tax relief, the Brewers' Association is also calling for a support and rescue programme for catering businesses and restaurants. When they open, beer can be sold there again.

READ ALSO: Oktoberfest in numbers: An inside look at Germany's multi-billion business
 


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