E-Malt.com News article: France: Since 1995, beer has been the worst performing commercial beverage category

Despite boasting one of Europe's lowest levels of Excise Duty, France does not have a strong beer drinking culture, Canadean Ltd commented on June 27. Furthermore, stricter drink-drive laws, changing consumer lifestyles and a sharp fall in cross-channel sales have all depressed the market.

According to a brand new report from leading beverage industry analysts Canadean, cross -channel traders are increasingly favouring more profitable products such as cigarettes. As a result, their Beer purchases have dropped dramatically and volume fell by an estimated 23% in 2004. The poor summer, which was almost a complete reversal of the searing temperatures of 2003, compounded the problem.

With the notable exception of Premium and Speciality Beers, the decline has been apparent in every segment. Standard Beer and Shandy have fallen sharply and sales of Bock/Light Beers have plummeted.

Per capita consumption of Beer, which is only around a third of that in the UK, has also fallen in comparison to other beverages. Tighter controls on the advertising of alcohol, the strong growth of Soft Drinks and a decline in the number of traditional cafes have all had a negative impact. However, a new tax introduced at the beginning of 2005 could provide an unusual but welcome source of relief.

Designed to help restrict the consumption of so called 'Malternatives', the tax charges an additional 110 Euros per litre of alcohol on drinks containing between 1% and 12% abv and in excess of 35 grammes of sugar per litre. Flavoured Alcoholic Beverages have been affected in two ways. Firstly, producers have reacted by reducing the strength of certain brands whilst the tax has inflated prices. If disillusioned consumers begin to look for something different, Premium and Speciality Beers could be set to benefit.

With their ability to command higher prices, Speciality Beer brands have proven particularly profitable. They have provided an opportunity to offset falling volumes with higher sales values and keen to take advantage, the brewers have aggressively marketed their offerings. Several leading brands have performed strongly, helping the Premium and Speciality segment to advance by an extremely encouraging 18% in the last four years.

Supported by the promotional strategies of the hard discounters, Distributor Own Brands are thriving in the Standard / Luxe segment, increasing their market share by seven percentage points since 2000.

The last two years have undoubtedly presented exceptional circumstances. Looking forward, a gentler rate of decline is expected to be seen in 2005. Should typical weather conditions, the continued promotional support of the brewers and the development of the retail sector all prevail, consumption of Beer in France is forecasted to fall by around 1% per year to 2010.


29 June, 2005