Lockdowns weigh on German beer sales, hurt small brewers
The closure of bars and the cancelation of major events in Germany are a big problem for the country's many small brewers, which rely heavily on selling draft beer to bars and restaurants
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Your support makes all the difference.Bars have been closed for more than three months, Carnival celebrations are canceled, and it's not clear when things will get better in Germany. That has left the boss of Brauerei Heller, an organic brewery in Cologne, thinking “from week to week” as she tries to chart a course out of the coronavirus pandemic.
Official data released last week showed beer sales in Germany dropped 5.5% last year to 8.7 billion liters (2.3 billion gallons), a decline fostered by lengthy shutdowns.
German bars and restaurants were closed from March until May, and have been shut again since the beginning of November as part of the country’s second lockdown. Major events and festivals where large amounts of beer would usually be consumed also have been canceled.
The current lockdown was set to end on Feb. 14, but the government could announce an extension on Wednesday that will keep on hurting beer sales.
That's a problem above all for Germany's many small brewers Marc-Oliver Huhnholz, the spokesman for the German Brewers' Association, says the country has over 1,500 breweries, including more than 1,000 small ones “that are very strong in the catering industry. So they sell their beer in their bars and restaurants, and they are, of course, massively affected.”
One such case is Brauerei Heller, a nearly 30-year-old organic brewery with its own beer garden. “We're getting through the pandemic from week to week,” CEO Anna Heller said.
Strong summer business followed Germany's relatively short first lockdown, but when the winter started “everything was over again,” Heller said. The brewery is largely dependent on draft beer; only about 20% of its output is bottled beer, which doesn't depend so much on open bars.
Heller says she has “no idea how far and how well we can carry on like this." Revenues were down 40% on a normal year in 2020, “and without help we wouldn't survive at all,” she said.
The German government has put together a series of aid packages for companies affected by the pandemic.
“We are producing now for the time afterward, because beer isn't ready straight away,” said Heller, whose brewery produces some 400,000 liters (105,000 gallons) in a normal year and has 15 employees. “We have to plan, look to the future and produce ahead of time, but if things don't go the way we hope, then we've produced for nothing and run up personnel costs.”
There's little visibility right now on when bars and restaurants might reopen. Germany's infection rates are gradually declining toward the government's target level, and politicians have vowed to open schools and childcare centers as the first priority.
Heller said she hopes for “clear figures” from political leaders on the point at which bars and restaurants can reopen, and says it must be recognized that they can't then close again after two weeks.
“That would break our necks,” she said.
Chancellor Angela Merkel and the country's 16 state governors are meeting Wednesday to discuss the way forward.
While beer remains emblematic of Germany, the country's beer sales have been declining gradually for years as a result of health concerns and other factors. They have fallen 22.3% since 1993.
But last year’s drop was unusually sharp, and a month-by-month breakdown pointed to the impact of coronavirus restrictions. Sales were down 17.3% in April compared with a year earlier, and down 14.1% in November.
Huhnholz says some breweries have seen revenue drops of up to 70% or 80%.
“We hope that if things open up around Easter at the latest, the catering business can resume, and many breweries will get out of the worst time since World War II and survive,” he said.
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Geir Moulson and Volkmar Kienoel in Berlin contributed to this report.
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