Germany: €8.4 billion beer industry expected to do well from football euphoria

Just as Germany has regained the ability to celebrate itself during the World Cup, the country has rediscovered a taste for the national drink, beer - at least for the duration of the sun-drenched tournament, Reuters communicated July 08.

Brewers in the country, where sales of beer have been on the slide for years, are cautiously optimistic the 8 billion euro ($10.2 billion) industry may return to growth in 2006 as they work round the clock to meet rampant demand at the World Cup.

Jubilant Germans and beer-guzzling fans from around the globe have helped brewers like Krombacher, Holsten and Radeberger to shift huge volumes of beer in June, after the biggest recorded increase in sales nationally in a year in May.

Joerg Schillinger, a spokesman for InBev, the parent company of Bremen-based Beck's, said the excitement surrounding Germany's unexpected success in the World Cup and relentless heat had stretched production capacity to the limit.

"We're laughing in one eye and crying out of the other at the moment," he said. "It's very difficult. We're getting trucks ready for dispatch like never before and doing everything in our power to deliver what people want - but it takes time to brew and deliver beer," he said, adding that fresh beer can only be stockpiled for limited periods.

Moved to caution because of an uncommonly long winter that dented demand at the start of 2006, the German Beer Brewers' association has said it hopes the World Cup, which ends on Sunday, will provide enough momentum to lift sales this year.

"Just like the industry as a whole, we hope we'll finish the year with sales slightly in the black," said Schillinger from InBev, which has a market share of some 11 percent in Germany. Birte Kleppien from the German Beer Brewers' association said while the industry had expected to do well from the World Cup, the wave of national euphoria that accompanied Germany's progress to the semi-finals had provided an unexpected boost.

"And then there have been other things, too," she said. "For example we never expected the English to descend en masse on the breweries in Cologne and show a real liking for the local beer - even though it's served in small glasses."

Kleppien said she was hopeful the industry, which has an annual turnover of around 8.4 billion euros in Germany and has been estimated to directly or indirectly employ 250,000, would benefit from the beer revival for some time yet.

"If the weather's good, I think there's a good chance the mood will last a bit longer than the World Cup," she said.

Nonetheless, with beer sales having dipped by over 8 percent to 106 million hectolitres in 2004 from 115.3 million in 1995, InBev's Schillinger said the industry still had much work to do.

"The brewing industry didn't do anything for its image for years," he said. "A lot of young people see beer as a drink for old guys with beer bellies. The industry must be more innovative and pay more attention to what consumers want to drink."

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