Contribution made by beer to the European Union Economy
Executive summary
In 2011, Ernst & Young and Regioplan Policy Research
jointly conducted, for the fourth time, a study focusing on
the economic impact of the production and sale of beer
in Europe.
The study encompasses the brewing sector in 31
European countries. However consolidated data relate to
the 27 Member States of the European Union. Below we
have listed the key economic messages from the 2011
survey in respect of EU-27.
Compared to 2008 the production of beer in the
European Union (EU) in 2010 fell by 6 percent (to 383
million hectolitres), consumption in the same period
declined by 8 percent (to 343 million hectolitres).
The greatest decline in production occurred in 2009,
whereas the decline in consumption has been constant
over the two years of this study.
The decline in production and consumption of beer
over the last two years, has resulted in the sector making
a lower contribution to the economy of the EU. Over
two years 260.000 jobs related directly or indirectly to
the production and consumption of beer, were lost; a
decrease of 12 percent compared to 2008. In the same
period, the total employment in the EU decreased by 2%.
Not only were 260.000 jobs lost because of this decrease
in production and consumption of beer, it also resulted
in a decrease in the total value-added attributed to beer
by 10%, and 6% less tax revenues for the 27 Member
States governments. The latter is despite a large number
of rises in VAT and excise rates across the EU.
The dominant factor in the diminishing economic impact
of the brewing sector in the EU is the ongoing reduction
in beer consumption. This is not only driven by the
recent global economic downturn, but also by four
trends in the beer market.
These are :
Decreasing consumption per capita; this trend started
a number of years ago and is expected to continue.
Consumers buying less premium brands of beer.
Relatively more beer being consumed at home
instead of in bars or restaurants, the result being
fewer jobs, less value added and lower government
revenues being generated by each litre of beer
consumed in the EU.
Increasing tax burden, especially consumer taxes
which have increased in many Member States, and
this trend will probably continue for the foreseeable
future. Higher taxes on beer lead to higher prices,
and reduces beer consumption particularly in
the hospitality sector, strengthening the trend for
consumption of beer in the home.
The brewing sector is also facing other pressures
including price rises for raw material inputs. We have
already calculated for the period 2009-2010 that the
value added for the breweries decreased by a larger
percentage than the value of the materials to produce
their beers, due to the increased competition and
smaller margins for breweries.
Against this background it is more likely that any further
increase will need to be passed on to the consumer in
full, despite the negative impact of higher prices on the
economic impact of beer.
9
Executive summary