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Cost of beer in Germany could soar by ‘up to 30 percent’

Germany is known for having low beer prices. But with rising inflation, consumers will have to dig deeper into their pockets for a Maß.

A man holds a beer during May 1st celebrations in Perchting, Bavaria.
A man holds a beer during May 1st celebrations in Perchting, Bavaria. Photo: picture alliance/dpa | Matthias Balk

The sun is out and the nights in longer which mean Germany’s Biergarten season is getting underway. But customers will have to prepare for a difference this year – the price of beer is likely to rise significantly. 

Germany’s brewers’ associations expect price hikes of up to 30 percent, according to a report by daily newspaper Bild. 

It comes as Covid restrictions have been eased across the country, meaning people are socialising much more again. Big festivals, including Oktoberfest, are also back this year. In 2019, guests guzzled 7.3 million beers during the rowdy festival. 

READ ALSO: Oktoberfest 2019 in numbers: A look at Germany’s multi-billion festival

But with inflation rising to record levels – it climbed to 7.4 percent in April – it’s perhaps no surprise that breweries are also dealing with price hikes, which are set to be passed onto customers. 

“The cost increases are beyond all dimensions,” Holger Eichele, General Manager of the German Brewers’ Association, told Bild. “Whether it’s pallets, brewing malt, beer mats or crown corks – the prices are going through the roof. We haven’t experienced anything like this yet.”

Stefan Fritsche, vice-chairman of the Berlin Brandenburg Brewery Association, another industry expert, told the newspaper that beer prices could rise to unprecedented heights. He expects beer prices to rise by up to 30 percent by the end of the year.

READ ALSO: Surge in prices creates headaches for German brewers

The reasons for the high beer prices are the rising costs the companies are facing.

Prices for gas have risen by 430 percent compared to the previous year, and prices for electricity by 250 percent. Even prices for pallets have risen by 150 percent. “It’s clear that such drastic cost increases have to be passed on to the price”, Eichele said.

READ ALSO: Why German beer day is celebrated on April 23rd

Food is one of the drivers of current inflation. In March 2022, for example, food prices rose by 6.2 percent compared to the same month last year. One reason contributing to this development is Russia’s war against Ukraine. Ukraine is considered the ‘breadbasket of Europe’ and has been the world’s largest exporter of sunflower oil. Prices for this product and similar oils rose by a huge 30 percent in March. Fresh vegetables also increased significantly by 14.8 percent.

Social and consumer associations have called for Germany to get rid of VAT on certain foodstuffs in the face of significant food price increases. 

Vocabulary

Cost increase – (die) Kostensteigerungen

Brewers/beer brewers – (die) Bierbrauer

Malt – (das) Malz

Beer mats – (die) Bierdeckel (singular: der)

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MONEY

Are the EC Card’s days numbered in Germany?

Maestro-function EC cards will no longer be issued as of July 2023. That may leave many people with German cards without the option to use the ubiquitous “EC Karte” abroad. Here's what you need to know.

Are the EC Card’s days numbered in Germany?

In a country that often lags behind much of the rest of the world digitally, cash is still king in many places. From restaurants to bars, cafes, and some smaller shops – options to pay by card are often limited. If a place does take card, it’s often the debit EC card, rather than a credit card or plastic from abroad.

That could soon see a shakeup.

Around 100 million EC cards are currently in use in Germany – more than the number of residents. These cards use two payment services: the Maestro service, which Mastercard provides, and the Girocard service which is independent. Maestro allows the holder to pay with an EC card when abroad, whether at a beach bar in Spain or a museum in Italy.

At home in Germany, Girocard processes EC card transactions.

But the EC card’s popularity here doesn’t translate elsewhere. German cards account for about half of all worldwide Maestro transactions, with the remaining half split absolutely everywhere else in tiny amounts. As such, it’s become difficult and expensive for Mastercard to maintain the old Maestro system that so many people in Germany love to use.

As of 2023, Mastercard will no longer issue Maestro cards, although people can still use ones issued before then until they expire. Without an alternative, that would leave some German debit card holders unable to pay using their new cards abroad.

Rumour has it that a similar Visa service – Vpay – is also on the way out soon.

That could see many cardholders ditch their old EC cards for Mastercard and Visa’s debit services — but around 250,000 businesses in Germany still only take payments made through the Girocard service — which isn’t a part of Visa or Mastercard. A big reason is that retailers pay lower fees to use Girocard.

What are the alternatives to EC Cards?

Where might that leave cardholders in Germany? It might put more pressure on retailers to accept services other than Girocard, which could incur fees that retailers will simply pass on to buyers.

It might leave some people carrying multiple cards, with a debit card they would only ever be able to use at home and not abroad. Or, it might mean carrying more cash just in case people come into an establishment that only takes cash and Girocard.

Some German banks have already moved ahead to offer customers integrated cards.

DKB, an popular online bank in Germany, sees Girocard as an outdated model that can’t be developed much further—and one that’s hard to use for online shopping. Since January, it has only issued customers with a Visa Debit card, but has left them the option to also have a Girocard. This will no longer be free though, costing customers an extra €1 a month.

A customer pays with EC card in a local shop

A customer pays with EC card in a local shop. Many businesses still only take EC card or cash payment in Germany. Photo: picture alliance/dpa | Rolf Vennenbernd

READ ALSO: Why Germans are finally choosing cards over cash

Other banks, like ING, use a ‘co-badge’ system that pays for both the licenses to Girocard and either Visa or Mastercard. However, that leaves cardholders paying a higher fee.

Professor Jürgen Moormann of the Frankfurt School of Finance and Management told Frankfurter Allgemeine Zeitung (FAZ) that MasterCard and Visa are probably discontinuing the Maestro and Visa services for EC cards abroad to put more pressure on Girocard within Germany.

This makes it more likely that retailers will start offering more card-based payment options, such as credit and debit card, to keep things simple for customers.

“They clearly want to increase their market share in Germany,” Moormann says of Visa and Mastercard.

While it’s still too early to tell whether the EC card will be squeezed out, regular cardholders may be left carrying more than one card — or paying higher fees for integrated cards — for a while yet.

In Germany at least, the EC card will be around for some time to come — but its days may well be numbered.

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