Beer sales plunge as pub and bar lockdown hits breweries

By Michelle Perrett

- Last updated on GMT

Beer sales have dropped in the wake of the Coronavirus pandemic
Beer sales have dropped in the wake of the Coronavirus pandemic

Related tags: coronavirus

Beer sales have plunged in the wake of the coronavirus epidemic and the shutdown of premises such as pubs and bars.

According to the British Beer & Pub Association (BBPA), pub beer sales collapsed by 40% in March 2020 compared to the same period in 2019, reflecting the immediate impact of the first two weeks of pubs lockdown.  

Sales in the ‘off-trade’ – such as supermarkets and off-licences – were up 10.6% on the same period last year. The BBPA said that the uplift, however, did not make up for the huge loss of beer sales in pubs, resulting in total beer sales in March 2020 down 12.7% when compared to March 2019 

The news followed claims by the BBPA that the Government’s refusal to defer beer duty​ was a huge blow to the brewery sector.

The BBPA and other trade bodies had called on the Government to defer April’s duty payment and those of the following quarter – totalling £750m – as a matter of urgency to provide vital cashflow support to the UK’s 2,000 brewers who supply the country’s pubs.

Beer sales down

The latest BBPA data followed a survey of small independent breweries by the Society of Independent Brewers (SIBA) last month, which showed that, on average, beer sales were down by 82% since the outbreak of COVID-19, with many businesses struggling to survive. 

Meanwhile, major breweries are also feeling the impact with brewers including Molson Coors and Carlsberg revealing a downturn in  beer sales volumes. 

Molson Coors Beverage Company reported during its first quarter results for 2020 that it was a period “unlike any other”.

Molson Coors president and CEO Gavin Hattersley said its results were “disproportionately affected”​ by the coronavirus and expected its second quarter results to be impacted. 

Molson Coors estimated that approximately 23% of its 2019 consolidated net sales resulted from on-premise consumption, with 50-55% of its European net sales coming from this part of the industry. 

Carlsberg Group revealed that there was a high degree of volatility and uncertainty”.

 

All markets impacted

CEO Cees’t Hart said that all its markets were impacted by greater or lesser extent”. 

“While we’re starting to see signs of recovery in our largest market, China, and initial signs of governments cautiously lifting restrictions in some Western European markets, other markets remain in lockdown. Nevertheless, social-distancing requirements will continue and will impact consumer behaviour. Consequently, volumes will decline further in Q2​,” he said. 

Meanwhile, concerns are also being raised about the impact on consumer behaviour going forward. 

Projections from GlobalData for the ​growth of the UK alcoholic beverages market have been cut. 

Beer and cider has dropped from a baseline value growth of +1.7% to a COVID-19-adjusted forecast of -6.7%. Similarly, wine has dropped from +2.7% to -8.5%, and spirits has gone from +5.1% to -6.9%. 

GlobalData’s COVID-19 consumer survey showed that 28% of 35- to 44-year-olds were buying more beer than before, while 24% were buying less, with similar occurring for wine and spirits.

It predicted that there could be an increase in beer subscription services following the easing of restrictions, with consumers less likely to go to out-of-home venues. 

Meanwhile, Titanic Brewery secured £1m​ in funding through the Government-backed Coronavirus Business Interruption Loan Scheme (CBILS), securing the jobs of its 200 workers in the process.

 

Related topics: COVID-19

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