BEER & HOSPITALITYBEER IS VITAL TO THE EUROPEAN ECONOMY AND IS CLOSELY INTERLINKED WITH THE SUCCESS OF THE HOSPITALITY SECTOR
The beer sector is embedded in communities. It sources locally, creating jobs in villages, towns, and cities across the whole of Europe. As much as 95% of beer-related employment usually occurs outside the brewing companies themselves. This means that 1 job in the brewery usually creates an additional 18 jobs in the economy. That economic activity provides significant tax revenues, in particular through hospitality beer sales, and value to local and national governments. We are proud that for a decade since the last economic shock, we could speak in the beer sector of stabilisation and recovery, followed by steady and sustained progress, further strengthening beer’s contribution to the European economy as a major consumer good and export commodity. Prior to the COVID19 crisis, the beer sector was growing, with production and consumption increasing, exports rising, brewery numbers on the up and the range of beers continuing to expand.
However, due to the pandemic and related restrictions on the hospitality sector, the number of jobs created in beer hospitality fell by 800,000. Since March 2020, Europeans have had to adhere to measures that aim to prevent social situations. Hospitality venues, where one third of all beers are typically served, have been shut down or heavily restricted, whilst most gatherings of friends and family, events, and festivals, were banned or had to be cancelled. The measures taken by governments in 2020 have disproportionately impacted bars and restaurants, eliminating 42% of beer hospitality sales volumes in Europe and decimating the significant, positive contribution made by the beer value chain to the wider economy. The size of the impact has depended on the spread of the virus, the extent of the restrictions imposed by government, the generosity of the support measures put in place and, perhaps most importantly, the size of the on-trade beer market which generated 45% less value added in 2020 compared to 2019 – a loss of €13 billion.
With a small increase in retail beer sales only picking up part of the slack, there was a net fall of 34 million hectolitres, or 9%, in the total volume of beer sold in Europe in 2020, wiping over €3 billion off the value of beer production in a single year.
Jobs generated in the whole beer value chain fell by 860,000, or one third in 2020, from 2.6 million people to 1.8 million, with the vast majority of these losses being in beer hospitality, but jobs also being lost in supply and distribution.
If the right support measures are put in place, it is expected that the diversity of choice, number of breweries, and interest in beer will remain high as we recover from the pandemic. Europe Economics’ new economic report shows that with continued targeted support, the jobs will return and governments can also expect to receive up to €11 billion in extra tax revenues if beer hospitality were to return to pre-pandemic levels of activity. The beer value chain bouncing back to pre-Covid levels can also bring the €13 billion in value added back into the European economy. However, many businesses will have been badly affected, some will have closed forever and solidarity and support will need to continue to ensure renewed growth that ultimately drives a green recovery for the whole economy.