3 | Changing patterns of consumption
4 | Higher prices for agricultural inputs
A decreasing consumption per capita is not the only threat
the European brewing sector has to deal with.National
brewers’ associations point out that the preferences of
beer consumers are changing. The main trends are that
consumers drink more beer at home rather than in the
hospitality sector. Purchasing beer for drinking at home
from the retail sector they also leads to signifcant changes
in the choice of beer brands. This trend was reported by
the national associations of the Czech Republic, Poland,
Latvia, Bulgaria, Croatia, Estonia, Cyprus, the Netherlands
and Romania.
The consumer trend from on-trade to cheaper off-
trade consumption of beer has already been presented
in paragraph 4.5 of this report. It is a European-wide
phenomenon., Both at European level , but also at the
level of the 31 countries studied, the percentage of beer
consumed in the hospitality sector by 38% to 36%. It is
important to note that this shift to home consumption is
not only due to the overall economic situation and the
price differential between beer in the hospitality sector and
the retail sector. Interventions by authorities, like smoking
bans in bars, have also had a signifcant impact in on-trade
consumption in recent years.
The switch to off-trade consumption is compounded by
the fact that in some countries there is downward pressure
on average price of branded beers in the retail sector. The
importance of the retail sector due to its concentration has
been highlighted for Germany, leading to an increase in the
number of special prices and offers. In Italy the impact on
retail prices was due to the supply of wider choice of beers
to the off trade. The increasing importance of the discount
segment on beer sales has been highlighted for Poland. In
Turkey beer sales increased in off-trade channels due to
price differences as a result of an increase in the number
of supermarkets and decrease in the number of groceries.
The shift to off-trade consumption has had a detrimental
effect on the sector’s contribution to the European
economy. Beer consumed in bars or restaurants provides
more jobs, value added and government revenues than
the same volume of beer consumed at home.
From an environmental perspective, a side effect of the
switch to off-trade consumption is that the off-trade use
of packaging materials per litre of beer consumed is larger
than on-trade.
As pointed out in chapter 6, the European brewing sector
has been confronted in recent years by higher prices of
agricultural materials needed for beer production. This is
mainly because the worldwide production of hops and
malting barley has decreased as a result of poor harvests.
These higher prices are also a result of growing worldwide
demand of agricultural land for the production of crops
as inputs for bio-fuel production. Altogether this has led
to a very tight world market for agricultural inputs needed
for beer and correspondently higher prices. In our survey,
national associations pointed out that it seems rather
certain that in the coming years the sector will again
experience higher prices for agricultural inputs.
The increasing price of agricultural inputs will be refected
in the fnal price of beer. however, market competition also
sets the rythm on the pass-through of this impact.
The Contribution made by Beer to the European Economy
48