Bars closed, festivals canceled: in Europe, beer sails in troubled waters

Calm reigns in Bruno Torres's La Baleine brewery in north-east Paris, from which some 560 hectoliters per year come out: the stainless steel fermentation tanks are empty and the small bottling line is stopped. He usually sells about half of his production to bars, cafes, restaurants, whose iron curtain dropped more than three weeks ago, when the containment in France ordered by the authorities began. " Some grocery stores also no longer want to open, for health reasons ," added Mr. Torres, who embarked on the adventure of craft beer in spring 2013.

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Closed bars, canceled festivals and sporting events ... Brewers in Europe are worried about their activity, booming in recent years, but now hit by a " catastrophic " brake due to the epidemic of Covid-19, even threatening Oktoberfest 2020. " The closure on March 15 at midnight of what is called out of home (cafes, hotels, restaurants), plus the cancellation of all events bringing together more than 100 people, so festivals, local festivals, trade fairs, it makes mathematically disappear 35% of sales volumes , "said AFP Maxime Costilhes, general manager of Brasseurs de France. An evaporation of outlets which has apparently not been compensated by a postponement of consumption in supermarkets.

" Beer is not one of the categories that benefited from this storage effect that the French adopted during the first weeks, " said Jacques Lebel, managing director for France of AB InBev, the world's leading brewer, during a interview with AFP. Beer sales have nonetheless increased by almost 7% since the start of containment compared to the same period in 2019, according to a study by Nielsen cabinet published this week.

But the situation is all the more critical as it occurs at the “ worst time of the year ”, underlines Mr. Costilhes, “ the period when we are at the lowest in cash, the month of March ”: “ the brewers spend the whole winter producing for the summer. Beer is supposed to be sold when the weather is nice, so we stock up, buy raw materials, and produce . ” " If it resumes at the end of April, it's not bad, if it doesn't resume, it will be hard, " said Bruno Torres.

The beer industry in Germany is sluggish

Across the Rhine, where beer has been part of the country's culture and gastronomy for centuries, pessimism is also in order. “ Sales in gastronomy are vital for most breweries. Some make 90% of their turnover there. And it disappears completely, now, ”commented to AFP Holger Eichele, president of the Federation of German breweries. The cancellation of major events " puts a lot of breweries and organizers on the verge of bankruptcy, " he said.

Federation spokesperson Marc-Oliver Huhnholz adds that since the end of March, beer sales have been down with -9.4% year-on-week the week of March 23. " It is linked to the growing restraint of purchase among consumers and the fact that many opportunities to celebrate with friends or family are disappearing, " said the spokesperson. " The coronavirus crisis will have a significant impact on employment in the sector, " according to the German brewing federation, which published a survey among its members on April 1. 18% expect layoffs, 87% expect partial unemployment.

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In early April, German breweries reported a sharp drop in exports (-58%), especially to China and Italy, the two largest foreign markets for German beer. The Minister-President of Bavaria, Markus Söder, said that if the famous Munich Oktoberfest (Oktoberfest) beer festival " takes place this year, it will be under very different conditions ", leaving fear of cancellation of this celebration which was to open on September 19. The organizers want to decide " at the latest in June ", according to the chief organizer, Clemens Baumgärtner. Millions of visitors from all over the world come to this celebration every year, which has been organized 186 times in its 210 years of existence. The first cancellation took place in 1854 after an epidemic of cholera.

For its part, the Dutch brewer Heineken, world number two in beer, estimated Wednesday that the coronavirus epidemic represented a " major negative macroeconomic development ". " This has a significant impact on Heineken's markets and business in 2020, " he added. The brewer, which has 165 breweries in more than 70 countries, anticipates a drop in the volume of its beer production of 2% in the first quarter of 2020, before an " aggravation " in the following months.