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CASTLE MALTING NEWS in partnership with www.e-malt.com Italian
11 November, 2022



Malting news France: Malt industry hit hard by high energy, production costs

Production costs fuelled by the current energy crisis are reaching record highs, making it very hard for France’s malt industry, the top exporter in Europe and the second-largest in the world, to keep delivering to brewers, Euractiv.com reported on November 11.

The exceptional rise in production costs due to increased prices for raw materials, energy, packaging and transport is also affecting brewers who recently made a plea for help.

However, the crisis appears to be spreading across the industry in France, as the union of French Maltsters, Malteurs de France, has now also warned: “against the dramatic consequences of the energy crisis on their profession.”

Malt is consumer beer’s main component, giving it its sweetness and colour. It is the product of cereals’ partial germination and drying – mainly barley.

France, Europe’s largest exporter, exports 85% of its production to the EU, Africa, Asia, and South America. One in five beers consumed worldwide is made from French malted barley.

But the manufacturing processes require a lot of energy, of which 80% is gas. The union added that energy consumption still remains very high “despite major efforts in recent years to reduce consumption”.

At the same time, “the price of gas has doubled, and even tripled this year in Europe, in the space of a year,” Olivier Hautin, the CEO of Malteurop, one of the world’s leading malt producers, told EURACTIV.

“The French government is not aware of the size of this sector and its fragility. And in Europe, everyone is looking at their own backyard,” said Hautin.

Spain, which is not so dependent on Russian gas, is doing better than countries like Germany which was heavily reliant on Russian gas before the crisis, helps its companies 20 to 30 times more than France, which is lagging behind in support.

With the situation looking grim, the French malt industry fears that with production costs through the roof, its competitive edge on the international market would gradually be dwarfed and benefit US maltsters in particular.

To keep up production amid rising prices, Malteurs de France is asking the public authorities to facilitate access to aid for these large, energy-intensive productions.

In the longer term, the sector is counting on the ecological transition to stop depending on Russian gas.

According to Hautin, investments will have to be borne by the public authorities, including the European Union, but also the industrialists and distributors. The aim is to become carbon neutral within 10-15 years.

On the consumer side, however, the increase in the price of beer is not obvious.

“Brewers are trying to pass on their costs to the sales price, but this is not happening. Or very little. There is a barrier imposed by the mass retail sector in particular,” explains the general manager of Malteurop and vice-president of Malteurs de France.

According to the union, this French flagship is not at the end of its tether: a doubling of cost increases is expected by 2023.





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