German Beer Exports Tumble on Non-European Markets Amid Trade Issues
Skyrocketing tariffs lead to steep decrease in beer exports
The brewing industry in Germany is grappling with a tough export scenario, particularly on certain non-European markets, following trade disputes and increased tariffs.
Tariffs aren't just a headache for exporters headed to the USA. A looming crisis is brewing on the remaining exports to Russia, foreseen to plunge dramatically due to increased tariffs, according to industry predictions.
Now, beer enthusiasts in Germany could potentially benefit from poorer export prospects, given the excess production capacity in the German brewing sector and dwindling domestic sales this year, as evidenced by the early-year figures.
"German breweries have been weathering the storm since April 5, 2025, due to the USA's ten percent base tariff and a 25 percent additional tariff on aluminum content in aluminum cans, as explained by Rodger Wegner, managing director of the Association of Export Breweries in North, West, and Southwest Germany. The tariff may escalate to 20 percent if the USA and the EU fail to agree on general tariffs, further clouding the outlook."
Where the Most Export Beer Flows
Data from the Federal Statistical Office indicates that almost one-fifth of German beer production, or 1.45 billion liters, is exported. Leading sales markets in 2024 were Italy with €324 million, China with €94 million, Russia with €85 million, France with €71 million, and the USA with €68 million.
In recent years, the relatively stable export has provided a lifeline for breweries, enabling them to better weather the steeper drops in domestic sales. Between 2014 and 2024, domestic sales plummeted by 15 percent, while exports shrank by 6 percent.
A tenfold rise in the Russian tariff to €1 per liter of beer could affect cheap beer manufacturers still present in Russia, predicts Niklas Other, publisher of the beverage trade magazine "Inside." "This means there will again be overcapacities that will inevitably cause pressure on other export markets and the domestic beer market," he explains. Many manufacturers of major German beer brands had earlier abandoned the Russian market after Russia's invasion of Ukraine in 2022.
Price Wars at Retail Level
Despite fierce competition, prices remain a strategic warground, especially at the retail level. As the Easter business has shown, retail chains continue to regularly offer beer at prices as low as €9.99 per case of 20 half-liter bottles as a loss leader to attract customers to their stores. "Who would buy at the regular price when they know another offer is likely to come soon?" says Other. Over two-thirds of the most commonly consumed beer type, Pils, in Germany is sold via promotional offers.
Two major beer manufacturers from North Rhine-Westphalia, Veltins and Krombacher, seem unfazed by the export business challenges. The European markets offer them reliable importers in Italy, Spain, and the Netherlands, as well as promising sales potential and appreciation in the gastronomic scene. After a sales decline in 2024, Veltins anticipates growth in 2025.
At Krombacher, exports make up a mere 5 percent of sales. "We only export insignificant quantities to the U.S., which is not a key market for our exports. Since the start of the war in Ukraine, we haven't been delivering to Russia."
Beverage manufacturer Oettinger, which owns breweries outside Bavaria, including one in Mönchengladbach, plans to intensify its focus on Asia. "We're also affected by industry developments. Not only for this reason, we've adjusted our strategy at Oettinger Beverages. We're making a concerted effort to boost exports to Asia, to tap into new markets and further expand our international presence."
Weathering the Storm
Meanwhile, the first two months of 2025 saw surprisingly weak domestic beer sales, according to industry expert Other. Overall, beer sales in Germany dropped by around 570,000 hectoliters in January and February compared to the same period last year. "That's roughly 115 million half-liter glasses that beer drinkers have turned down," Other pointed out. The prognosis for the entire year isn't optimistic: "It would take a scorching summer to save German brewers' sales."
Insights:
- Historically, German beer exports have been strong in key European Union markets, the United States, China, the United Kingdom, the Netherlands, South Korea, and Russia.
- Trade conflicts and tariffs can affect export volumes and prices but, in the case of German beer exports to the USA, the US market remains significant for major German beer exporters like Löwenbräu and Paulaner.
- Changing market dynamics, such as global declines in beer consumption, growing interest in healthier options, and evolving consumer preferences, pose a more significant challenge to German beer exporters than any specific tariff-related challenges. German beers still retain a strong global reputation, but exporters need to adapt to these shifts to maintain their market share.
In light of the challenging export scenario on certain non-European markets, German breweries might find solace in increased domestic sales as excess production capacity could potentially benefit local beer enthusiasts. Despite the USA remaining a significant market for major German beer exporters, the sports of beer, exported abundantly from Germany, might see a shift in focus towards other promising markets such as Asia to compensate for the losses.
