EU: Brewers of Europe assess impact of Covid-19 on 2021 beer sales

Ongoing COVID-19 measures taken by governments in 2021 continued to hit bars, restaurants and events, disproportionately impacting brewing and keeping beer hospitality sales 35% below 2019 volumes. Overall, beer volumes in 2021 remained more than 7% lower than 2019 numbers whilst beer production in the EA19 (the 19 nations-members of the euro area) was also 11% below 2019, contrasting with the fortunes of wines and spirits, which actually saw an increase in production compared to 2019, the Brewers of Europe said on June 28.

According to their Economic report to assess the impact of Covid-19 on the brewing sector in 2020-21, COVID-19 in 2021 continued to affect the contribution that beer makes to the wider economy. In 2021, in spite of the 2.3 million jobs generated by beer, there were still over 250,000 fewer jobs created by beer than in 2019, whilst value-added was over 10% down and government tax revenues 13% down, principally due to the €5.2 billion in lost VAT receipts collected through beer hospitality pre-COVID.

The year 2021 provided a mixture of ups and downs for the beer sector. In the former camp were speedy vaccination rollouts in some countries and the gradual return of summer tourists in others. In the latter, there were new COVID-19 variants and the consequent resumption of some restrictions, including further drastic shutdowns of the hospitality sector. The Brewers of Europe’s updated modelling presents the following results for 2021:

COVID-19 impact on beer sales and production
• The on-trade share of the beer market in 2021 was less than one quarter, compared to the one third it consistently represented each year from 2017 to 2019.
• On-trade beer consumption reached 78 million hectolitres but was still 42 million hectolitres (or 35%) below 2019 levels. Whilst many countries experienced hospitality consumption growth, the segment continued to decline in others.
• Off-trade consumption remained above 2019 levels, at 263 million hectolitres (nearly 6% above 2019), slightly lower than its peak in 2020 when some consumption shifted from the on- to the off-trade.
• At 342 million hectolitres, beer consumption overall in 2021, though 8 million hectolitres above 2020, was still nearly 8% below 2019 levels.
• Whilst spirits and wine manufacturing recovered in 2021 (ending the year 5% and 3% above their 2019 output levels, respectively), beer production increased only marginally and remained 11% below its 2019 level.

Outlook for the future

Whilst the impact of COVID-19 may be receding, it is clear that the European economy is now facing new, additional pressures which will affect consumer spending and place greater financial burdens on many businesses.

So, whilst Europe gets used to “living with COVID” and it is less likely that extensive hospitality restrictions and full travel bans return, it remains unclear whether the social impact of the pandemic, coupled with other challenges, will accelerate more fundamental shifts in business practises and consumption patterns.

Whilst overall beer volumes may return, the impact of beer on the wider economy might be subject to uncertainty if the change in the split between on- and off-trade is maintained in the future. Whilst higher volumes in the off-trade would offer new opportunities for some brewers, consumers, job development, value creation and revenue generation, it is also possible that these will replace other delivery channels (bars and restaurants in the on-trade) that have traditionally been more labour intensive and have supported more jobs, the Brewers of Europe said.

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