Beer good for Europe, association argues
continent's economy every year, according to a new study.
A report commissioned by Brewers of Europe, an industry association, puts Europe's beer industry on the par with the national economies of Austria or Poland. The association underlines the importance of the sector amid flagging market conditions and increasing regulatory scrutinity of the health and social impacts of alcohol. Europe is the most important beer producer in the world, ahead of China and the US, according to the study, conducted by Ernst & Young. However, shrinking and stagnant beer markets across much of Western Europe have forced many international brewers to re-think their strategy in the region. With the European Commission expected to publish a report on the health and social impact of alcohol in June, the industry is under pressure over its marketing practices. The association's study, by Ernst & Young, focused on the 25 member states of the enlarged European Union and also on Norway, Switzerland, Croatia, Bulgaria, Romania and Turkey. European breweries provide jobs for 164,000 employees, while 2.6 million jobs can be attributed to the brewing sector, the study found. About 3,000 small and medium sized enterprises are involved in Europe's brewing sector. Jobs in the brewing sector are spread across Europe, with concentrations of direct employment to be found in Germany and the UK, followed by a number of Central and Eastern European countries such as Poland, the Czech Republic and Romania. Other findings include: Of the seven largest brewers in the world, four are European, making the continent the world leader in beer exports; National governments receive €39bn in tax revenues national governments receive from the production and sale of beer. The total contribution of the brewing sector to the European economy in terms of value added is €57.5bn of which 21 per cent is generated directly by the brewing sector. Supply sectors account for 20 per cent, the hospitality sector 56 per cent and the retail sector three per cent of the rest. Consumers spend an estimated €125bn euros on beer annually, of which some 72 per cent is spent in the hospitality sector. European breweries produce 416 million hectolitres beer, of which 23 million hectolitres is exported to outside Europe. Earlier this week Carlsberg announced that plans to scale down operations in Western Europe in favour of emerging beer markets in Eastern Europe and Asia has helped it to improve first quarter results this year. The brewer said it decided to cut sales through non-profitable, discount channels in Sweden and Italy, though was also hit by weaker on-trade beer sales in the UK. Carlsberg confirmed last autumn it planned to shut around half of its 29 European breweries, including its original Valby brewery, within the next decade. A group spokesperson said the move reflected a permanent shift in beer market growth from west to east. Carlsberg still made a net loss of €24m in the first quarter of 2006, but was down from a loss of around €40m in the same period in 2005. Operating margins in Western Europe recovered to 0.3 per cent in the quarter, after hitting -1.7 in this time last year.
