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CASTLE MALTING NEWS in partnership with www.e-malt.com
04 June, 2020



Brewing news EU: Europe’s bars and breweries face battle for survival

On a sun-doused pavement in the French city of Lyon, workers were frantically away at the mountain of chairs and tables before them, Euronews reported on June 3.

After weeks of laying idle, bars across the country were being disinfected ahead of their planned reopening on June 2.

Similar scenes have already played out in parts of Italy and Spain as they desperately try to stem the losses of lockdown.

Meanwhile, in the UK and elsewhere in Europe, breweries and bars are nervously eyeing when the beer taps can flow again.

But merely serving again is not a panacea for an industry worth €55 billion to the EU economy and the source of 2.3 million jobs.

For a start, social distancing will likely mean fewer punters at a time when bars need them most.

Then there are the additional costs of cleaning and adapting premises to keep people apart as much as possible.

Add in the losses from lockdown and you have a deadly cocktail that threatens the survival of thousands of bars.

The British Beer and Pub Association (BBPA) says 40% of its members would not be able to survive beyond September if lockdown continues.

That could equate to the closure of 10,000 pubs and the loss of 100,000 jobs, according to BBPA chief executive Emma McClarkin.

"It's been devastating for the bar and pub sector in the UK,” McClarkin told Euronews.

"People are missing the great British pub. After friends and family, it is the thing they are missing most during the lockdown.”

Like the UK, Spain has been hit hard by the lockdown. That’s because both have a culture of drinking out. The proportion of beer sales at bars and restaurants is higher than at shops and supermarkets.

The opposite is true in Germany, Europe’s biggest beer market, where purchases at bars make up just 20% of total sales.

This reliance on retail might have shielded the country from the worst effects of lockdown, even though COVID-19 caused the cancellation of Oktoberfest, the Munich extravaganza that sees seven million litres of beer consumed each year.

Bars and breweries elsewhere in Europe have tried to change tack, with some shifting production to bottles rather than barrels. Others have simply cut out the middleman and sold directly online.

Ninkasi, a brewery with a host of bar-restaurants in Lyon, said it was losing €10,000 a day at one stage of lockdown. But it managed to reduce the daily deficit by bringing forward a project to introduce online ordering for pick-up in person.

In the UK, the Campaign For Real Ale (CAMRA) set up an online platform to help pubs sell online.

In Denmark, People Like Us, a brewery run by people with autism, sold special selections of beers and then got an expert to host an online tasting session, where the merits of each one could be discussed.

Nevertheless, experts say any increase in retail or online sales won’t make up for losses made during the lockdown.

“The loss of sales in bars, restaurants and cafes is not being compensated for via retail,” said Pierre-Olivier Bergeron, secretary-general of Brewers of Europe.

“The very fact bars and cafes were closed has meant no clientele at all for small brewers. Small brewers are trying to find their way via e-commerce but it will never compensate for the loss.

“The situation is quite straightforward. Before the crisis, I was able to report that Europe accounted for 10,000 individual breweries. I’m not assured I will be able to report the same next year.

“It’s a real loss. Europe is the cradle of modern beer.”

Yet, despite the lows of lockdown, many pubs and bars have tried to use the time positively to cement ties with customers.

Some in the UK have switched from being pubs to hubs, providing a vital service to communities during confinement.

The Chequers in Aylesford, Kent, south-east England, has been delivering free hot meals to anyone over 70 within the village or nearby. Another pub ran a loneliness helpline. Others turned into greengrocers or takeaway outlets.

“The pandemic has been the biggest challenge our industry has faced, but licensees have shown huge resourcefulness in transforming their businesses overnight to serve the needs of their community in the ‘new normal’,” said Des O’Flanagan, co-founder of PubAid, an organisation that highlights pubs as a force for good in their communities.

“Pubs have been at the heart of their communities for centuries, and the last few weeks have demonstrated just what a vital role they play: the support they are offering to local people, particularly those who can’t leave home, is invaluable, and is frequently done for no gain, just a desire to help.”

In France, a scheme was launched to boost bars’ cashflow by letting punters buy beer vouchers during lockdown that can be redeemed once restrictions have been lifted.

Ninkasi has been offering virtual tours of its brewery to help build its digital brand and expand it beyond Lyon to the rest of France, according to company founder Christophe Fargier.

In the Czech Republic, a website was created to allow microbreweries to sell their beer at a discount before it went off.

At the end of March, there were nearly six million bottles from 169 small breweries waiting to be snapped up.

It offers a window on the sheer scale of beer at risk of being lost to lockdown.

While there are no Europe-wide figures yet, BBPA says in the UK 70 million pints — or 40 million litres — have been poured away. Brasseurs de France estimated 10 million litres were destroyed.

Replenishing these stocks will be a huge logistical challenge for breweries ahead of reopening in the UK, McClarkin added.

But while the big barrel changeover is hidden from view, customers won’t be able to avoid noticing other likely changes to the pub experience.

Nik Antona, national chairman of CAMRA (The Campaign for Real Ale), said there will likely be more table service, threatening the UK culture of going to the bar for service.

There could also be one-way systems and reduced capacity to adhere to the UK’s two-metre social distancing rule, he added.

“Most of the pubs are small and intimate so they may not have the staff or be big enough to let people sit that far apart,” said Antona.

To get around the problem of reduced capacity, city authorities in the Lithuanian capital Vilnius have allowed restaurants, bars and cafes to expand on to public pavements and squares.

Other bars have turned to technology to help adhere to social distancing.

Lubos Kastner, who runs several bar-restaurants in the Czech Republic, said his outlets have QR codes on the tables that fire up the menu on customers’ smartphones, allowing them to order without a member of staff having to come over.

Ninkasi will employ a similar system for ordering as well as using QR codes on receipts to let people pay online after leaving the bar.

One bar in Seville, Spain, has bought a robot that can pull a beer and place it on the counter for a customer to pick up.

Yet some bars might not be around long enough to implement the technology. McClarkin has this weekend called for immediate government support to stop UK pubs from closing.

The government has helped by paying a proportion of workers’ wages and providing financial grants. But many city pubs do not qualify for the latter, according to Antona, and this, coupled with their higher fixed overheads, put them at most risk for going bust.

Beyond state help, others, like Kastner, are pinning their hopes on a strong summer and adapting the business model to meet the “new normal”.

Ninkasi's Fargier is looking long term.

“For bars and restaurants, I think people realised during the confinement the importance of social contact, so I hope that will come back,” he said.

“But we’re operating on a reduced capacity until spring 2021 by which time hopefully they will have a treatment or a vaccine.”

Yet many of Europe’s breweries and bars might not have that long. They need an antidote to financial ruin, and soon, or the hangover may prove to be fatal.





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