Challenges Facing German Breweries on Beer Day

April 23 marks the celebration of Beer Day in Germany, yet the outlook for the brewing industry appears grim this year. Domestic beer drinkers may find some silver lining amidst these challenges.

German breweries are grappling with significant export issues, particularly in certain non-European markets where opportunities have diminished. Increases in tariffs, notably for exports to the United States, have exacerbated this situation. Experts predict that remaining exports to Russia may dwindle due to high duties imposed.

While these export challenges loom, German consumers might benefit from the resulting oversupply in the domestic market. The latest figures indicate a steep decline in beer sales within Germany, contributing to substantial overcapacity in local breweries.

Currently, German breweries are subject to a ten percent base tariff imposed by the United States as of April 5, 2025, alongside a 25 percent additional tariff on beer contained in aluminum cans. Should negotiations between the U.S. and the EU fail to resolve these trade disputes, tariffs could increase to as high as 20 percent by July.

According to data from the Federal Statistical Office, nearly 18 percent of Germany's beer production--approximately 1.45 billion liters--was exported last year. The primary markets for German beer included Italy, China, Russia, France, and the United States, with Italy leading in revenue generation.

Historically, a stable export market has provided some cushioning against domestic sales declines. From 2014 to 2024, domestic beer consumption decreased by 15 percent, while exports only shrank by six percent.

The Russian market poses additional challenges, with tariffs increasing to one euro per liter for beer. This situation primarily impacts cheaper beer brands, leading to further excess production that may strain both other export markets and the domestic market.

Promotional pricing strategies within retail chains are also benefiting local consumers. During recent holiday periods, retailers employed aggressive pricing tactics, offering beer at competitive rates to attract customers. As a result, a significant portion of the beer sold in Germany is now through promotional offers.

Major breweries like Veltins and Krombacher express cautious optimism regarding their export strategies. While acknowledging the competitiveness of non-European markets, they are focusing efforts on neighboring European countries where they have established reliable import networks.

Oettinger Brewery is redirecting its focus toward Asian markets, seeking to expand its international presence in light of current market conditions.

Despite these strategic shifts, the domestic beer market has seen troubling trends. In the first two months of 2025, beer sales in Germany plummeted by over 570,000 hectoliters compared to the previous year, equating to nearly 115 million half-liter glasses of beer that consumers chose not to purchase. Analysts predict that unless summer conditions are exceptionally favorable, the forecast for the year remains bleak for German breweries.