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17 August 2018

Hot weather causes beer bottle shortages

Climate change? Then let’s have more of it if it helps German brewers hike sales. However, brewers are desperate. Unforeseen demand has caused a shortage of empties in the market.

Initially, German brewers were concerned that all their advertising spending for the FIFA World Cup would be wasted after Germany’s national team ingloriously departed early in the tournament. Soccer is a big driver for beer sales here. The World Cup in 2010 and 2014 hiked volumes by four percent each time.

But this year they need not fret either. The scorcher that has the country thirsting for beer since June continues to be upon us and will compensate brewers more than they could have hoped for.

German brewers sold 47.1 million hl beer during the first six months of 2018, not counting the popular non-alcoholic beer offerings. This is an increase of 0.6 percent year-on-year. It may not seem much but, considering that German beer consumption has been declining for nearly three decades, this must count as a success. In 2017, beer consumption fell 2.5 percent.

The funny side of things is that brewers have been kind of overwhelmed by demand. They are running short of bottles. For several weeks, there have been desperate pleas by brewers in the media, calling upon consumers to return their empties to the shops. Germany has a returnable and refillable bottle system for beer.

Of course, the bottle shortage really points to a lack of investment in both bottles and crates. There are an estimated 180 million crates (plus bottles) in circulation. While the generic beer bottle pool was set up decades ago to benefit all brewers and ease out swings in demands, plenty of German brewers have refrained from adding bottles to the pool. Worse still, all of the major brewers and a host of smaller brewers have introduced proprietary bottles.

Beer distributors are not amused either. They are the first in the firing line if shoppers cannot find their beers of choice. Moreover, the logistics chain from brewers to distributors and retailers is very tight already because of brewers’ optimisation processes in the past.

At the same time, retailers’ promotional activities, selling ten litres of beer for less than EUR 10, are creating additional demand. Lucky brewers with canning lines have found a way out. Some are selling 500 ml cans of lager beer for – hold your breath – EUR 0.69 (USD 0.80) or less at Lidl.

Really, if German brewers cannot meet demand this year, they only have themselves to blame.