EU must capitalise on brewing industry's economic potential

It is high-time that EU decision makers fully recognised the brewing sector's job and growth potential in contributing to the Europe's economic recovery, argues Pierre-Olivier Bergeron.

By Pierre-Olivier Bergeron

Pierre-Olivier Bergeron is Secretary General of The Brewers of Europe

03 Mar 2014

Earlier this month, we saw the publication of a study commissioned by the Brewers of Europe on the contribution made by beer to the European economy.

Authored by the social and economic research agency Regioplan and the international professional services agency EY (formerly Ernst & Young), the report illustrated how beer is making an important and valuable contribution to Europe's economic recovery.

It is my view that EU leaders must capitalise on the beer sector's potential to drive forward economic development in 2014 and beyond, and create a favourable regulatory climate that stimulates investment and nurtures growth for the sector.

Against the backdrop of slow and fragile economic recovery and pan-European unemployment reaching 12 per cent, the European brewing sector represents the low-hanging fruit that can drive economic prosperity and create jobs across Europe's markets.

Representing one per cent of all EU jobs, the sector remains a leader creating two million jobs for Europeans across a wide value chain from agriculture, packaging, logistics and marketing to retail and hospitality.

The nature of brewers' business activities supports a flexible labour market and allows for the creation of sustainable and quality jobs in Europe, particularly in the youth employment market.

[pullquote]In addition to its significant contribution to employment, brewing also makes a substantial contribution to the advancement of Europe's nascent economic recovery[/pullquote].

As other regions in the world enjoy a more accelerated resurgence following the detrimental effects of the financial crisis, the EU is struggling to keep pace. Many European industries continue to suffer mountainous debt and production cost levels that curtail any opportunity for growth.

However the study shows how, after three years where production and consumption fell by eight per cent, production in the brewing sector grew modestly by two per cent over the following two years with an annual trade surplus having reached €3bn while EU beer consumption grew by one per cent over the same period.

These figures are testament to the sector's potential to stimulate growth and deliver sustained prosperity in a time of continued financial hardship.

Despite its resilience in the face of economic challenges, the brewing sector is not immune to the pressures of global recession. Unfavourable developments in national fiscal policy, characterised by steep increases in VAT rates and excise duties, adversely affected sales and jobs in the hospitality sector.

Certain domestic markets experienced particularly crippling tax hikes, such as in France where excise duties increased by a staggering 160 per cent in 2013. All in all 15 per cent of the jobs along the value chain have been lost since 2008.

Fortunately, other member state governments are becoming increasingly aware of the brewing sector's potential to drive growth.

The UK and Denmark embarked on a reduction in taxation on beer in 2013 as part of their wider efforts to support the domestic beer and pub trade, while Italy, only weeks ago, abandoned a third tax hike on beer in six months, just before the law was due to come into force on 1 March.

It is high-time that EU decision makers fully recognised the brewing sector's job and growth potential by reducing the burdens on Europe's 4500 breweries, enabling us to actively contribute to the EU's economic recovery.

Read the most recent articles written by Pierre-Olivier Bergeron - Putting 'brewing green' at the heart of the European Green Deal