beer industry
Global forces and the European brewing industry
Mike Blee and Richard Whittington
This case is centred on the European brewing industry and examines how the increasingly competitive pressure of operating within global markets is causing consolidation through acquisitions,
alliances and
c/osures within the industry. This has resulted in the growth of the brewers' reliance upon super brands. ln the first decade of the twenty-first
century,
European brewers faced a surprising paradox. The traditional centre of the beer industry worldwide,
and
still the largest regional market, Europe, was turning off beer. Beer consumption
was falling in the largest
markets of Germany and the United Kingdom, while burgeoning in emerging markets around the world.
China, with 7 per cent annual growth, had become the largest single market by volume, while Brazilian volumes had overtaken Germany in 2005
(Euromonitor,
2006).
Table 1 details the overall decline of European beer consumption. Decline in traditional
to several factors. Governments
key markets is due
such as Tesco or Carrefour, which often use eut-priee offers on beer in order to lure people into their shops.
are campaigning
strongly against drunken driving, affecting the
More th an one-fifth of beer volume is now sold
propensity
through supermarkets.
to drink beer in restaurants,
pubs and
German retailers such as
bars. There is increasing awareness of the effects of
Aldi and Lidl have had considerable
alcohol on health and fitness. Particularly ln the United
their own 'private-Iabel'
Kingdom, there is growing hostility towards so-called
beers. However, although on-trade volumes are fallin_
'binge drinking',
in Europe, the sales values are rising, as brewers
excessive alcohol consumption
in
pubs and clubs. Wines have also become increasingly
introduce higher-priced
success with
(rather th an
Mike Blee and Richard Whittington
This case is centred on the European brewing industry and examines how the increasingly competitive pressure of operating within global markets is causing consolidation through acquisitions,
alliances and
c/osures within the industry. This has resulted in the growth of the brewers' reliance upon super brands. ln the first decade of the twenty-first
century,
European brewers faced a surprising paradox. The traditional centre of the beer industry worldwide,
and
still the largest regional market, Europe, was turning off beer. Beer consumption
was falling in the largest
markets of Germany and the United Kingdom, while burgeoning in emerging markets around the world.
China, with 7 per cent annual growth, had become the largest single market by volume, while Brazilian volumes had overtaken Germany in 2005
(Euromonitor,
2006).
Table 1 details the overall decline of European beer consumption. Decline in traditional
to several factors. Governments
key markets is due
such as Tesco or Carrefour, which often use eut-priee offers on beer in order to lure people into their shops.
are campaigning
strongly against drunken driving, affecting the
More th an one-fifth of beer volume is now sold
propensity
through supermarkets.
to drink beer in restaurants,
pubs and
German retailers such as
bars. There is increasing awareness of the effects of
Aldi and Lidl have had considerable
alcohol on health and fitness. Particularly ln the United
their own 'private-Iabel'
Kingdom, there is growing hostility towards so-called
beers. However, although on-trade volumes are fallin_
'binge drinking',
in Europe, the sales values are rising, as brewers
excessive alcohol consumption
in
pubs and clubs. Wines have also become increasingly
introduce higher-priced
success with
(rather th an