Fatal development of events in Germany is accelerating: Germans risk being left without beer and sausages

In Germany, there are problems with the production of beer and sausages. Industry on the brink of economic collapse

Fatal development of events in Germany is accelerating: Germans risk being left without beer and sausages
Photo © Getty Images / Frank Rumpenhorst

On Monday, the German business community discussed two disturbing pieces of news. First, due to energy savings, large supermarket chains are beginning to reduce working hours, which cannot but affect sales.

Secondly, banks in Germany began to actively refuse loans to entrepreneurs. The explanation is simple: financiers are afraid of an impending recession and a dangerous wave of bankruptcies. These are the results of a survey conducted by the Munich Institute for Economic Research. It was published on Monday and showed that 24.3% of companies that currently want to get a loan from a bank are faced with refusals.

At the same time, for many companies, credit is now the only way to survive. This also applies to beer producers. Since the end of September in Germany, brewing companies have begun to suspend production. Now the risk of closing companies is growing.

Thus, the business newspaper Handelsblatt described the problems of beer producers in southern Germany. There, part of the breweries were forced to close for a while due to a lack of raw materials. In particular, one of the largest breweries in Thuringia, which has been making a foamy drink for 130 years, has suspended production.

In Germany, a number of fertilizer factories closed a few months ago. As a result, the output of a by-product, industrial volumes of carbon dioxide, was reduced. As a result, the cost of one ton of carbon dioxide increased 35 times: from one hundred euros to three and a half thousand. At the same time, carbon dioxide is simply indispensable in the production of beer.

The German Federal Food Industry Association noted that CO₂ is extremely important to the industry because it turns into carbonic acid when it reacts with water. All these are important processes for the production of a foamy drink. Sounded the alarm and the Association of German Brewers. Breweries need additional CO₂ to pressurize kegs, tanks and bottles. Otherwise, the beer will foam too much, which it shouldn’t.

In the German press, the problems of the brewing industry are raised constantly. They cannot be solved without stabilization of the situation in the commodity market. The German newspaper Der Spiegel even wondered if the Germans would have to stop drinking beer altogether. However, the inhabitants of Germany are not at all satisfied with this development of events. Brewers too. At the same time, there is no systemic solution to production problems yet. The industry was on the brink of economic collapse.

Der Spiegel even raised such a seditious question: will the famous Oktoberfest in Munich become a wine festival? Indeed, wine producers have much less problems. Production technologies do not require such an amount of gas and electricity as pubs. However, the German journalists themselves admitted that the Bavarians would never exchange beer for wine.

An original solution was proposed by the Minister of Economics of Bavaria, Hubert Aiwanger: to capture carbon dioxide, which is produced in cement plants, and supply it to breweries. “Will the beer smell like a construction site, but not a construction site with beer?” joked the locals.

The higher the quality of the beer, the more energy it requires to produce it. This product has always been a hallmark of Germany, they are accustomed to taking production seriously here. If the problems with raw materials are not resolved, then some companies may simply leave the market.

However, the manufacturers remaining on the market are already starting to save. As a result, the quality of beer is reduced. Another way to save is banal underfilling. As it turned out, not the best examples of serving a foamy drink were found even at the recent Oktoberfest.

According to the department of the district administration of Munich (KVR), the so-called unterschank (in other words, underfilling) was found in 31% of the samples of the drink presented at the festival. For comparison: in 2019 it was at the level of 18%, and in 2018 – 14%.

What difficulties are experienced by producers of sausages and frankfurters
One in four companies in Germany are now planning job cuts. This is the result of the energy crisis. Such conclusions were made by analysts of the Family Business Fund during the study, which was published on Monday. By the way, sociologists conducted a similar survey in April. For comparison: at that time only 14% of the surveyed employers were ready to cut staff.

Rainer Kirchdorfer, head of the Family Business Foundation, called the survey results “a wake-up call.” There is already a gradual relocation of production capacities. This fatal development in Germany is accelerating. Companies are reducing production in Germany or moving it to where energy costs, taxes and labor costs are less powerful.

Many companies are going through hard times. Including in the agro-industrial complex segment. Here, problems with energy are superimposed also by difficulties with fertilizers.

According to a study by the consulting firm PwC Strategy&, the current way of producing food and the high consumption of meat threaten the global food supply in the future.

At the same time, meat producers themselves face big problems. So, two years ago, veterinarians first discovered African swine fever (ASF) in a wild boar in Brandenburg. Since then, the German pig breeders and butchers have been in a crisis, which is now only getting worse. As a result, the production of the main snack for beer and the second business card of the German food industry – sausages and sausages, may also be under threat.

Nina Vazhdaeva, LIFE

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