E-Malt.com News article: 3264

Germany: Despite searing temperatures, the German Beer market declined more sharply in 2003 than in any of the previous three years. According to a brand new report from leading beverage industry analysts Canadean, the effects of the controversial deposit scheme were dramatic. Introduced on the opening day of the year, the scheme charges consumers a deposit on all non-refillable packs and actually resulted in some retailers de-listing products from their shelves altogether. As a result, sales of canned Beer were decimated with consumption plummeting by more than 70%. The repercussions were widespread and even the Beer Mix segment, which has been expanding rapidly, took a significant downturn.

The launch of the scheme could not have come at a worse time for the market, which has been in decline for a number of years. Overall, consumption dropped by more than 3% although the losses in canned Beer were partly offset by the strong growth in exports, particularly to other EU countries. Although export levels have traditionally been low when compared with domestic consumption, they are now booming. As turnover increases, German brewers are unsurprisingly showing a greater interest in these foreign markets!

The largest segment, Pils, was responsible for over 90% of the total market decline. Much of this volume was lost to the third most important and fastest growing segment, namely Export (Export style beers as opposed to Exports). Second placed Weizen also grew strongly and is now enjoying something of a cult status. The on-premise channel proved especially rewarding for the segment which is moving further away from its regional roots in southern Germany to become a national and international favourite. This said, the very small number of national brands indicates that the potential for further growth may still be considerable.

Between 1999 and 2002, consumption of Beer Mix Drinks grew by almost 80%. However, many products launched exclusively in cans were withdrawn from sale completely once the retailers began de-listing. The segment also faced increasing competition from flavoured alcoholic beverages.

Germany remains the largest Beer market in Europe and is home to no less than three quarters of the EU's brewers. The number of breweries is expected to decline as the merger and acquisition activity seen in recent years continues apace. Looking forward, Canadean predict that the impact of the deposit scheme will be softened as more brands are marketed in refillable packs and retailers institute systems for the return of packaging. Exports should continue to thrive in 2004 but the familiar challenges presented by the shift towards healthier lifestyles, lower disposable incomes and the substitution of Beer for other beverages are likely to result in total consumption declining further still.


15 September, 2004