High cost pressure burdens the brewing industry

25-Jan-2023 - Germany

German breweries are facing massive cost increases. According to an analysis by the German Brewers' Association (DBB), in addition to the cost of gas and electricity, brewing malt and packaging materials in particular have recently become drastically more expensive. Carbon dioxide, the price of which had almost doubled in the meantime, was at times no longer available on the market at all, so that in 2022 individual companies in the beverage industry had to halt production. Here, however, the situation has eased considerably.

"Inflation is putting a lot of pressure on the economy. We must expect costs to remain at a high level in 2023 and in some cases to rise further," says DBB General Manager Holger Eichele. The continuing high cost pressure is the biggest challenge for the brewing industry in the new year, he said, along with maintaining a secure and affordable energy supply. Above all, sharply rising costs for raw materials and intermediate products, as well as personnel and logistics, are putting a strain on the companies. This will also have an impact on prices, according to the DBB's forecast. Numerous breweries in Germany are facing an extremely difficult fiscal year and have already announced price increases for 2023.

According to the German Brewers Association, the industry has proven extremely resilient in recent years and has been able to successfully hold its own during the crises overall. "Many breweries have been able to use the experience gained from the Corona crisis, even if the dimensions today are incomparably greater," Eichele said. "We have been operating in a permanent crisis mode for almost three years now. Cost increases and unexpected bottlenecks in the supply chains have been with us since the beginning of the pandemic. Russia's invasion of Ukraine in violation of international law has exacerbated the problems even further. Today, however, the brewing industry is much more resilient than it used to be."

For the months of January to November 2022, the German brewing industry's sales of 81.2 million hectoliters of beer (excluding non-alcoholic varieties) represent an increase of 3.2 percent compared with the crisis year 2021. This is a positive signal only at first glance, because in the pre-Corona year 2019, beer sales in the comparable period had still been 85.2 million hectoliters. The beer sales figures for the full year 2022 will be published by the Federal Statistical Office at the beginning of February.

Note: This article has been translated using a computer system without human intervention. LUMITOS offers these automatic translations to present a wider range of current news. Since this article has been translated with automatic translation, it is possible that it contains errors in vocabulary, syntax or grammar. The original article in German can be found here.

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