You are on page 1of 10

1

Meredith Weaver
HON 325
Final Copy
December 9, 2015

A Brief Overview of European’s Beer Market: 2008 - 2015

Beer has almost always seemed to be an essential component to European culture, as seen
through the popularity of the drinks in ancient times, up to present times. It continues to have a
large impact on European’s social lives. Such an essential piece of culture must have an impact
on Europe’s markets, seeing that so much of it is produced, sold, exported, and consumed.
Considering all of the social aspects surrounding beer in European cultures, one is led to wonder
how it impacts the continent economically. Looking into the beer markets in England, Scotland,
Germany, and Ireland can help to give insight into what impact beer truly has on European
markets. Comparing these four markets and using them collectively will aid in showing the
movement of the European beer market, mainly over the past seven years.
The four countries of interest were chosen because of the availability of information in
regards to these countries. The easier it is to find information, the better one is able to analyze
these countries. The United Kingdom and Germany are also included in Europe’s ten largest
economies, making their contributions to the beer market substantial (Fox).
While all of these countries consume a large amount of alcoholic beverages, each country
of interest has a different type of beer which is most popular. This is one of the many things
which must be considered when comparing their beer markets. In England, lagers seem to be the
most popular among those who drink beer; however, England is known for primarily producing
ales (Malin). Likewise, Scotland is known for their ales, which were produced despite the

2
decline in the market demand for strong ales. Germany has the most diverse production of
beers, including wheat beers, pale ales, dark beers, and unfiltered lagers (Malin). The German
diversity in beer production causes their market structure to be highly complex, and is an aspect
that needs to be taken into consideration when analyzing market structure. Ireland also has a
variety of popular beers, including stouts, ales, and lagers. While their beer production is not as
vast as Germany’s, they still have a number of different production factors to consider for market
analysis.
In order to successfully compare these four countries of interest, they need to be analyzed
individually. Amounts produced, consumption rates, amounts imported and exported, the
number of breweries in existence, types of breweries, and revenues gained through beer
production must all be considered for each country. Consumption rates will be shown in a per
capita ratio, so as to even the population differences of the four countries. Figures for these
variables will be from 2008-2013, as these are the most recent data sets available. While there
has most likely been change in these figures between 2014 and 2015, the accuracy of these
figures when comparing the different variables will give an accurate vision of the change in
Europe’s beer market over the past five or six years. Because statistics on England and Scotland
are both included in the statistics for the United Kingdom, the United Kingdom will stand for
both countries.

3

2008

2009

2010

2011

2012

2013

Germany

91,132

86,563

87,872

87,765

86,279

85,888

United
Kingdom

49,611

45,141

44,997

45,694

42,047

41,906

8,846

8,041

8,249

8,514

8,195

8,008

Ireland

Beer Production (in 1,000 hL):

Consumption Rate Per Capita (in liters):
2008

2009

2010

2011

2012

2013

Germany

111

110

107

107

108

107

United
Kingdom

84

76

74

74

67

66

Ireland

99

91

90

86

86

79

2008

2009

2010

2011

2012

2013

Germany

6,485

6,532

7,485

7,694

7,279

6,036

United
Kingdom

9,372

7,735

8,055

8,393

8,797

8,776

1,065

1,264

Beer Imports (in 1,000 hL):

Ireland

N/A

N/A

N/A

N/A

4
Beer Exports (in 1,000 hL):
Number of Brewing Companies:
2008

2009

2010

2011

2012

2013

Germany

15,772

14,046

15,161

15,986

15,697

15,091

United
Kingdom

5,124

4,748

4,583

4,528

5,853

6,549

3,518

3,988

Ireland

N/A

N/A

N/A

N/A

2008

2009

2010

2011

2012

2013

Germany

9

9

9

15

16

16

United
Kingdom

711

733

817

937

1,289

1,479

24

24

24

24

24

30

Ireland

Number of Microbreweries:
Revenues Gained (in millions of Euros):
(All statistics above are taken from “Beer Statistics,” edited by Mariles Van de Walle.)
2008

2009

2010

2011

2012

2013

Germany

524

628

646

659

665

668

United
Kingdom

671

694

778

898

1,250

1,440

Ireland

N/A

N/A

N/A

N/A

N/A

N/A

5
As an overall theme, one can see the decline in the beer market in European countries.
2008

2009

2010

2011

2012

2013

Germany

736.47

728.82

711.63

702.26

697.00

669.00

United
Kingdom

4,592

3,270.55

3,670.63

3,973.02

4,229.73

3,888.69

427.13

404.30

320.11

307.30

308.00

358.00

Ireland

This is shown through reduced production, reduced imports, reduced consumption per capita,
and most importantly, reduced revenues from beer related production. This begs the question why? What has been happening in European countries over the past five years that has caused
European beer consumption to fall so much? Revenues in the United Kingdom alone have
decreased by 704,000,000 euros. Consumption per capita has dropped 18 liters. Simply put,
people are buying and consuming less beer.
There are several reasons for this decline. Possibly the most prevalent is the amount of
readily available substitutes for beer, both alcoholic and nonalcoholic. Not all consumers prefer
beer, and although it has become a European staple of sorts, the people are beginning to veer
toward different beverages altogether. Drinks such as vodka, wine, rum, whiskey, carbonated
soda, tea, coffee, and energy drinks are becoming a more popular choice among many
Europeans. Overall, the millennial generation prefers other drinks than beer. Personal
preferences are causing less beer to be bought and sold to consumers. (PR Newswire)
Another reason contributing to the decline in beer production and consumption is related
to Europe’s economy as a whole. As a result of European economies declining over the past few
years, people who do drink beer are more likely to buy a pack of beer and drink it at home, rather
than go out to a bar to drink with friends, where beer is sold at a higher price. Less beer is being

6
sold in pubs, clubs, hotel bars, restaurants, and similar establishments. Because 73% of jobs in
the beer industry are in jobs associated with components outside of breweries, the decline in a
presence of customers at bars and similar establishments is costing workers in the beer industry
their jobs (Management Insights).
Yet another important factor to consider when thinking about the beer market are the
taxes imposed on beer. This issue is most prevalent in Ireland, although it exists in most
European countries. According to the Alcoholic Beverage Foundation of Ireland (ABFI), Ireland
drinkers pay twice what German drinkers pay for a pint of of alcohol. The price of beer in
Ireland is the third highest price of beer in any European Union country. The taxes were put in
place as an attempt to control alcohol abusers. This, however, has many negative effects on
Ireland’s beer market. In 2014 alone, an estimated 700 jobs were lost as a result of the increased
taxes (ABFI). It also causes concern when considering the growth and development of the
market in Ireland, because the tax is causing consumption rates to drop. As consumption rates
drop, the producers are unable to turn a big enough profit to expand or attempt new things within
their companies. Despite the fact that these taxes were put into place in order to bring revenue
from the beer sector into government hands, over time, they have decreased the overall revenues
in the beer sector all across Europe. Effects on employment in the beer industry can also be seen
throughout Europe. Jobs in beer related sectors have fallen by twelve percent from 2008 to 2010
(Ewing).
Although the beer market is struggling overall in European countries, one area of the beer
sector which seems to be thriving is microbreweries. From 2008 to 2013, the number of
microbreweries in the United Kingdom alone have grown by 769. While people are drinking
less beer overall, they are beginning to drink beer for the different tastes, aromas, and variations.

7
This newfound appreciation for specialized, more upscale beer has hurt large brewing
companies, but it is causing microbreweries to grow rapidly and do well economically. The
increasing number of microbreweries in these countries is a tell-tale sign that the business is
profitable. Economically, if people see others turning a profit on their capitalist ventures, they
will follow in their steps and do a similar thing. This, however, does not mean that the growth of
microbreweries will be able to compensate for the decline in the drinking of mainstream beer.
Analysts do not expect the growth to come anywhere close to covering the loss of mainstream
beer drinkers (Daneshkhu).
Despite the overall decline in domestic beer drinking in Europe, the amounts of exports
have grown substantially over the past five years. This is because beer has become more popular
around the world. In America alone, beer accounts for about 86% of alcoholic beverages
consumed. (PR Newswire) Alongside beers from large brewing companies, American taste for
imported craft beers has grown as well. This is causing a growth in amount of craft breweries in
Europe because of the export possibility. Not only are craft beers being exported by European
countries, but big companies are still able to export their beer to America because of the growing
demand for the drink. This is helping to keep the European beer market a small amount more
balanced than it would be without exports (Daneshkhu).
Declines in the beer market are being fought heavily by beer producers in Europe. For so
long, it has been a market which was sure to turn a profit, because of the high demand for beer
by most Europeans. Because this is changing, beer companies are doing everything to try and
move their products and continue to turn a profit (McCorriston, 102). In Germany specifically,
there has always been an appreciation for beers which are locally produced with a tie to local
land or agriculture. Marketing directors at German breweries are doing everything to tie these

8
things into their beer marketing. Commercials include shots of local and well known scenery as
an attempt to appeal to consumers who need that “personal touch” when they consume beer. An
example of this can be seen by looking at the German beer brands Jever and Flensburger, who
use scenic landscapes in Northern Germany with all of their advertisements (McCorriston, 103).
A different obstacle which marketing teams are trying to overcome is the seasonal feel
that beer has grown to have over the past few years. Beer consumption rises quite a bit during
holidays and large sporting events, or even warmer weather. While marketers play into these
aspects when selling beer by using these circumstances to heavily promote their product, they are
constantly working on ways in which to promote their product other times of the year. This is
essential to beer companies because sales during peak seasons are not enough incentive for a
company to remain in business (McCorriston, 103)
Another component which seems to be essential to beer customers in Germany especially
is the local beer company. Over seventy percent of people interviewed stated that their local
brand is more important to them than pricing points (McCorriston, 103). Breweries all over
Europe are using this to their advantage. In order to boost sales, a small number of large
breweries have been brewing craft beers because of their newfound prevalence in the European
beer market. This is a tactic which seems to be helping the companies, because while they are
producing a different type of beer, their name is known and trusted, causing the beer to sell faster
than a new craft brewery might be able to sell their products. The ability of these companies to
maintain their consumer base while charging more for a craft beer is helping them to turn and
maintain profits (McCorriston, 104).
There are many different obstacles which Europe’s beer market is currently facing. From
lack of customers, to taxes of beer, to different drink preferences. The market is struggling, and

9
is expected to continue struggling. Attempts are being made in all parts of the beer sector in
order to increase revenues and help the beer market to grow once again. However, despite the
many attempts being made throughout Europe, within the next five to ten years, the beer market
in Europe is not expected to grow internally. Inversely, exports are expected to be on a steady
incline, which will help the beer market to grow back to where it was before (Daneshkhu). This
is helpful because of the large role that beer has played economically in European countries over
the years. So long as exports can make up for the lost internal consumption, those in the beer
industry may be able to salvage jobs and companies may be able to remain in operation.

References:
"Alcohol Beverage Federation of Ireland (ABFI)." ABFI. Alcohol Beverage Federation of
Ireland, 2015. Web. 19 Nov. 2015.
"Beer Market in the US." PR Newswire. N.p., 29 Oct. 2015. Web. 22 Nov. 2015.
Daneshkhu, Scheherazade. "Microbreweries Shake up Europe’s Beer Market - FT.com."
Financial Times. N.p., 28 Nov. 2014. Web. 19 Nov. 2015.

10

Ewing, Jack. "It's a Beer Recession." Economix Its a Beer Recession Comments. New York
Times, 19 Sept. 2011. Web. 19 Nov. 2015.
Fox, Benjamin. "Four EU Countries in Top 10 World Economies." <i>Four EU Countries in Top
10 World Economies</i>. N.p., 26 Dec. 2014. Web. 03 Dec. 2015.
Malin, Joshua. "The Most Popular Beer In Every Country." VinePair RSS. Vine Pair, 11 Mar.
2015. Web. 19 Nov. 2015.
"Management Insights." Management Science 53.4, Strategic Dynamics (2007): n. pag. Bar
Expert. Web.
McCorriston, Steve. "Food Price Dynamics and Price Adjustment in the EU." Google Books.
N.p., n.d. Web. 19 Nov. 2015.
Walle, Marlies Van De, ed. "Beer Statistics." Significance 3.3 (2014): 126-29. The Brewers of
Europe, Oct. 2014. Web. Fall 2015.