“There is hardly an area where our suppliers are not raising prices or fighting against rising costs,” says Ulrich Biene, communications manager for the company based in Grevenstein, in the west. from the country.

For the family brewery, whose origins date back to 1824, the recent decision to increase the case of 24 beers by one euro was not taken lightly.

"We've seen a cost explosion over the past 15 months," the likes of which we haven't seen in decades, says Biene.

This is the first increase at Veltins for three years but others should follow.

Because the new price of beers is based on "the prices of the fall of last year".

Translate: the inflationary effect of the war in Ukraine has not yet been taken into account.

Many brewers, including Radeberger, Krombacher and Bitburger, have also been forced to pass on rising costs to their selling prices.

This increase in a flagship product in the basket of German households is highly symbolic in a country where inflation is at the top of the agenda at the moment.

In March, consumer prices rose 7.3% year on year, a record since the country's reunification in 1990.

The figures for April will be released on Thursday, and further acceleration is expected.

Fifth element

For German brewers, the effects of the war in Ukraine and the supply shock following the Covid-19 pandemic have created "the perfect storm".

The cost of malt purchased by Veltins - one of the four legally permitted ingredients in Germany, along with water, hops and yeast - has increased by around 70%.

Companies are struggling to recruit drivers for beer deliveries, and even pallets for packing produce have become a scarce commodity, as the nails that go into making them were often supplied from Ukraine.

But it is above all the energy, "the fifth ingredient", which weighs on the charges.

“Energy is the most important factor for the German beer industry and gas plays a significant role,” says Biene.

The logo of the Veltins brewery on a facade of the factory in Grevenstein, western Germany, on April 26, 2022 Yann Schreiber AFP

You have to heat the mash vats and run the bottle-filling machines.

Around 20,000 hectoliters of beer are brewed, bottled and shipped daily from the Veltins factory, an imposing building in a leafy village of less than a thousand inhabitants.

The brewer has to deal with an increase of more than 400% in the cost of gas since the start of 2021, as the recovery in demand after the epidemic and tensions with Russia have driven prices up.

A halt in deliveries of Russian gas, on which Germany depends to cover a large part of its energy needs, would probably mean "significant limits on production", says Ulrich Biene.

Heating and transport

The increase in the price of beer is "understandable" judge Bernhard Jung, 57, a resident of Krombach, another stronghold of the brewing industry located 36 kilometers from Grevenstein.

"I'm surprised the breweries didn't raise their prices sooner, given the huge energy costs," he told AFP outside a drinks supermarket.

Karin Müller, 81, who has just finished her weekly shopping with her husband Willibald, 83, finds that it is "the cost of each item that is a little higher"

The couple especially notices the increase in the price of heating oil.

Karin confides that she turned down the heating at their home and "wears a jacket" inside.

In March, consumer prices rose in Germany by 7.3% over one year, a record since the country's reunification in 1990 Ina FASSBENDER AFP / Archives

Hanna Siebel, 35, a university worker, says "people don't drive so fast anymore" on their way to work to save fuel.

The German government recently responded to mounting price pressure by adopting a multibillion-euro support package to ease the bill for households and businesses.

© 2022 AFP