Glass half empty for Germany's proud beer industry

Apr 18 2014, 14:13 IST
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SummaryTraditional family breweries, also under pressure from double-digit rises in energy, glass and malt costs, are struggling, some dying.

Behind the pale yellow walls of a former Benedictine monastery on a wooded hill near Munich, the master brewers of Weihenstephan are still perfecting their art after nearly 1,000 years of making beer.

Since Saint Corbinian and his monks first created a golden, nourishing beverage from local hops, the world's oldest brewery has withstood fires, plagues, plundering foreign armies and secularisation.

Weihenstephan's cosy brew house, dominated by four steel vats of foamy brown liquid and infused with the sweet smell of malt, embodies a proud beer culture that culminates every year in Munich's Oktoberfest folk festival - a 16-day homage to beer.

Yet for many German brewers, the good times are over.

A slump in consumption of more than a third in the last 25 years has hit Germany, Europe's biggest beer producer, triggering intense competition and price discounting.

With young Germans turning to spirits and non-alcoholic fruit drinks, beer sales fell 2 percent last year alone.

Traditional family breweries, also under pressure from double-digit rises in energy, glass and malt costs, are struggling, some dying.

"We're in an extremely tough market," Weihenstephan boss Josef Schraedler told Reuters. "You can't grow here unless you lower prices or .. develop a cult brand and charge a premium."

Weihenstephan is shielded by its rich history and ties to a prestigious brewing academy next door that helps innovation, but Schraedler says the deteriorating market has become a threat to small-to-mid sized brewers in towns across Germany.

In a sign of how dire the market is, five domestic brewers were fined this year for price fixing. In a bid to lift weak exports, the sector is trying to get the famous purity law, or Reinheitsgebot, put on UNESCO's world heritage list. The law prescribes beer's four ingredients: malt, hops, yeast and water.

Germany's DBB beer association has sounded the alarm.

"Beer risks becoming an outdated product," it warned earlier this year. Nowhere in the world is beer as expensive to make or cheap to buy as in Germany. Nowhere does brewing make so little money, the DBB says.

In a country where songs praising the golden brew are part of national culture, that hurts.

Germans still drink more beer per head than anyone else in the world, bar the neighbouring Austrians and Czechs.

It is not uncommon, especially in southern Germany, to see older men savouring a large beer at breakfast. Until recently it was sold on factory floors. It was easy for breweries to grow complacent.

BRUTAL

Although craft

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