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Drinks

Italian Beer Industry Looks To Recover After COVID-19 Impact

The Italian brewing industry saw beer production fall by more than a fifth (22%) in the period most affected by the COVID-19 pandemic, from March to June 2020, with only a limited recovery in the months that followed, new data has shown.

According to figures published by Osservatorio Birra, a peak drop of 30% in production was seen in the period March-May, while a timid recovery took place in July (+8%) and August (+2%).

The lockdown period pushed down the value of the beer sector by almost €1.6 billion, with a loss of about 21,000 jobs along the entire supply chain in a six month period.

On the positive side, the first two months of the year, prior to the COVID-19 outbreak, confirmed the positive trend of recent years, recording an increase in production of 7% and 12%, respectively.

Beer Demand

Despite the difficult situation, Italian demand for beer has not faded, with the beverage being the most consumed drink during the lockdown and during the summer months.

Leading breweries have implemented changes to their production and logistics networks, creating conditions to keep their employees safe and maintain production, thus guaranteeing a regular supply of product to the large-scale retail trade.

However, sales in the retail channel have not managed to offset the lost sales through the closed HoReCa network, according to Osservatorio Birra.

For example, last month, Heineken, which owns Italian beer brand Birra Moretti, said that beer volumes in Italy increased by a mid single-digit, with 'high-single-digit growth in the off-trade partially compensated for by a low-single-digit decline in the on-trade'.

It did add that it managed to 'outperform the market' however, with a strong performance (+10%) from its premium portfolio, which includes the Sardinian beer Birra Ichnusa and Messina.

Growing Marketplace

Prior the COVID-19 emergency, the Italian beer industry was going from strength to strength, with an industry that generated €9.48 billion of shared value in 2019. This figure corresponds to 0.53% of GDP, and 72% of the production value of the alcoholic beverages sector in Italy.

Beer production reached 17.2 million hectolitres at the end of 2019 (+35% compared to 2009), with 36.1% of consumption concentrated in the HoReCa sector.

In view of the challenges it is faced with, the Italian beer sector has asked the Italian government to review its taxation policies on beer by reducing excise duties and VAT, thus enabling brewers to allocate these resources for future investments.

© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine

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