Report / Covid impact on beer sector

European beer brewers hard hit

Many beer glasses remained empty due to governmental restrictions in 2020.
IMAGO / Ralph Peters
Many beer glasses remained empty due to governmental restrictions in 2020.

Througout Europe, the beer brewing sector was deeply affected by the restrictions imposed on hospitality by governments since March 2020. A recent report commissioned by the Brewers of Europe gives a thorough overview of the pandemic’s devastating impact.

Shutdowns of hospitality venues, bans on alcohol consumption and prohibition of large and medium-scale events were just a few of the numerous restrictions implemented by governments throughout Europe that also had a negative effect on beer sales. According to The Europe Economic’s Beer Covid Impact Report, in 2020, 42% of beer hospitality sales volumes in Europe were eliminated. Sales volumes dropped from 126 million hectolitres in 2019 to 73 million. „This drop in consumption, provoked 860,000 job losses, a 25 percent decline in beer’s overall value-added to the European economy and a 23 percent decline in government tax revenues from beer”, the report summarizes the overall pandemic impact.

The drop in on-trade beer sales was offset only slightly by an increase of 8 percent (20 million hectolitres) in off-trade beer sales. Overall, beer sales volumes in Europe dropped by 9 percent (34 million hectolitres) in 2020.

Impact on employment, value-added & government revenues

Apart from beer sales and production, the report equally looks at the impact Covid restrictions had on employment, value-added and government revenues. Here are some major findings:

 „Modelling suggests the number of jobs created by beer fell from 2.6 million people in 2019 to approximately 1.8 million in 2020, a fall of 33% or around 860,000. The hospitality sector was hit hardest, with more than 4 in 10 beer-generated jobs being wiped out, or almost 43% of employees losing their jobs (or dependent on temporary unemployment benefits).“

 „The value added by the beer sector reduced by over €15 billion, or 25%, from €60 billion in 2019 to €47 billion in 2020. Again, the on-trade hospitality sector represents the highest proportion of this fall in value added, generating 45% less value in 2020 compared to 2019 – a loss of €13 billion in the value usually added by beer hospitality.“ 

Total taxes paid by the beer sector in Europe amounted to €36 billion in 2020, down by €11 billion, or a 23% decline, from €47 billion in 2019. €7 billion of this was loss of VAT usually collected through the on-trade, a further €1.1 billion was lost in excise duties and €4 billion of the drop was from lower Income, Payroll and Social Security Contributions.“

The full report complete with numerous charts and in-depth analysis is publicly available here.

 


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