11%
17%
27%
45%
Direct effect (breweries)
Indirect effect (suppliers)
Hospitality industry
Retail
5 | Induced effects of the brewing sector
Hospitality sector
The economic impact of breweries on the hospitality
sector is assessed as follows :
About 6% of all beer consumed in Latvia is sold by the
hospitality sector (on-trade), which means almost 0.089
million hectolitres is sold on-trade.
The average consumer price of beer in Latvian pubs
and restaurants is estimated at 2.90 euro a litre
(including VAT), so that total consumer spending
on beer in the hospitality sector is 26.0 million euro
(including VAT).
Net consumer spending on beer is thus estimated
at 21.5 million euro (using a 21% VAT tariff).
With an average hospitality turnover of 19,220 euro
(excluding VAT) per person, this results in 1,120
hospitality sector jobs attributable to beer sales.
Retail
The importance of the brewing sector for retail
can be similarly assessed :
Around 94% of total beer consumption (1.4 million
hectolitres) in Latvia is beer sold by supermarkets
and other retail outlets.
With an average consumer price of 0.78 euro per litre
(including VAT), total retail consumer spending on beer
is estimated at 109.4 million euro. Total consumer
spending excluding VAT is thus 90 million euro.
With turnover per employee estimated at 124,683 euro
(excluding VAT), this means 725 people owe their jobs
to retail beer sales.
In 2010, approximately 1,700 people were employed in
Latvian breweries.. Employment in the supply sectors is
rather important with a total number employed in these
sectors arising from the brewing sector of a little over
2,900.
Around 1,120 jobs in the hospitality sector and 725 jobs
in the retail sector can be attributed to the sale of beer.
The total employment impact due to beer production
and sales in Latvia is therefore 6,450 jobs. Compared to
2008 this means a decrease of around 330 jobs, mainly
due to the job loss in the hospitality sector which can be
attributed to the drinking of beer.
›
Graph 23.3. / Total employment because of beer : 6,450 jobs
›
Source : Ernst & Young calculation (2011)
(see Annex III for an explanation of the methodology).
6 | Total employment due to beer
The Contribution made by Beer to the European Economy
148