May 2001 - Nr. 5
Crying in Their Beer
TWIG - April 23 is the day all true beer lovers drink a toast in memory of Duke Wilhelm IV of Bavaria. It was on that date in 1516 that Wilhelm signed the Reinheitsgebot that prohibited Bavarian brewers from using ingredients other than barely, hops and water in making beer. The Reinheitsgebot ("purity order") remains in effect to this day and stands as a symbol of the German brewing industry’s commitment to the highest standards of quality.
The mood was not entirely festive, though, as the industry marked "German Beer Day" (Tag des deutschen Biers) this year. Germans are drinking less beer than they used to, the German Brewers’ Federation reports, and many brewers are feeling the financial effects of declining consumption. Last year, by the federation’s calculations, the statistically average German drank 125.5 litres of beer, about ten litres less than five years earlier. Beer industry turnover has fallen from DM 19.7 billion in 1995 to DM 18.1 billion in 2000. "This basic trend will persist," Dieter Ammer, president of the Brewers’ Federation, glumly predicted as he spoke with reporters in Berlin on the 23rd.
Brewers have been reporting declining profit margins for decades, Ammer went on to note, but the oft-predicted consolidation of the German beer industry has yet to occur. Germany is currently home to 1,270 breweries that produce over 5,000 different brands of beer. Many breweries, especially smaller regional breweries, have been trying to compensate for declining beer consumption by expanding into the bar and restaurant business. Ammer expects consolidation will largely bypass small brewers, whose numbers are actually expanding, and affect mainly mid-sized and large firms. Strategic alliances and cooperation - sharing bottling facilities, for example - are also likely to become more important as pressure grows on larger brewers to cut costs.
