Why Are Europeans Drinking Less Beer?

We know that the art of brewing dates back to the Ancient Egypt, but it was not until after the Middle Ages that commercial brewery operations started in various European regions. These days, we look to Europe not only for tasty mass-produced beers but also for standards of quality as well as trends; this is why the third quarter financial report published by Heineken NV is concerning.

According to an October 26 news segment broadcast by CNBC, Heineken executives reported the sharpest drop in sales since 2019. Shares of the Dutch company fell by more than 9% upon release of the 3Q report, which was filled with missed sales and revenue projections. Demand for Heineken and other beers such as Sol and Tiger Lager fell the most across the European markets, and this was a disappointment because market analysts believed that the waning COVID-19 pandemic would drive more people to enjoy beer at pubs, bars, and restaurants.

The reality of the situation for Heineken is that inflation has substantially hit the pockets of European beer lovers. Germany is already in a recession, and the United Kingdom is already deep into an economic crisis that is not related to national politics for a change. Many economists believe that France and Italy will be in a recession by the end of the year.

Heineken, a company with roots dating back to 1844, remains a huge player in the European beer market, and it also enjoys a wide presence in places such as India and South Africa. The company operates in more than 180 countries and produces about 12 billion liters of beer a year.

What we are seeing with Heineken, however, is something that is not that uncommon during the times of recessions and financial crisis: the price of beer is on a steady decline. This is not all that new for beer lovers, but it is true that this has become a problem for smaller brewers who cannot make up for the lost revenue. Moreover, small breweries that sell their products at supermarkets and gas stations are also affected, as consumers don’t want to pay the exorbitant prices.