Price war in retail:

Brewery boss: “Beer is far too cheap”

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14.04.2024 11:47

Although many people moan because a beer often costs almost six euros in restaurants, the barley juice is still being sold off in supermarkets. "75 percent of beer is sold on promotion, and the trend is rising," says Tobias Frank, Technical Managing Director of the Ottakringer Brewery, to the Krone.

The proportion of promotional beer has generally increased over the years. The can is often available at minus 50 percent, i.e. "59 cents upwards", says Frank, who emphasizes: "From a brewery's point of view, beer is far too cheap because it is an agricultural product. It takes a year for the barley from the field to reach the glass in the form of beer. That should be valued."

The prices at the pub are already quite high - but the supermarkets are putting the breweries under pressure. (Bild: Markus Wenzel)
The prices at the pub are already quite high - but the supermarkets are putting the breweries under pressure.

Ottakringer cannot pass on the higher costs in full
A price of 59 cents is "not good for beer culture", economically "at the limit" and only possible because producers and retailers share the discount. At the same time, however, the breweries are suffering from the cost increases. Frank: "We can't pass on the higher costs in full to consumers and try to cushion the impact through efficiency." This is only partially successful, as the operating results of recent years have been negative.

Tobias Frank, Technical Managing Director and 1st Brewmaster at Ottakringer (Bild: Martin Jöchl)
Tobias Frank, Technical Managing Director and 1st Brewmaster at Ottakringer

Frank understands the higher prices in the restaurant trade: "It's a different concept, there's service and you get fresh draught beer, the freshest beer of all. The restaurant business also has high costs for rent, staff, etc."

Ottakringer is number three in Austria after Brau Union (Gösser etc.) and Stiegl, according to its own figures. It is the market leader in Viennese gastronomy. Although turnover of 61 million euros in 2022 increased in the previous year, the volume produced fell to 426,000 hectoliters.

The Ottakringer brewery in Vienna's 16th district was able to increase its turnover in 2023, but sales volumes fell. (Bild: The Guardians of Social Media)
The Ottakringer brewery in Vienna's 16th district was able to increase its turnover in 2023, but sales volumes fell.

Lighter varieties are in demand among younger beer drinkers
Frank wants to grow thanks to innovations. Frank: "Lighter beers are particularly popular with the younger target group. Our Ottakringer Lager, for example, has an alcohol content of just 4.7 percent instead of 5.3 percent for the classic Märzen beer."

Ottakringer now offers restaurant customers a special service: beer straight from the tank. Frank: "It's the freshest, it's not even stored in barrels. It comes straight from the brewery to the restaurant." There are already 30 customers in Vienna, including the well-known "Bermudabräu".

The company wants to further increase sales with new varieties. (Bild: The Guardians of Social Media)
The company wants to further increase sales with new varieties.

With regard to the gastronomy partners, Frank hopes that the recent warm weather will continue: "The pub garden season is just starting. We do our main business in the six months from April to September."

A can is like a small barrel - that's best for beer quality
As 1st master brewer, Frank also knows whether the beer is better in a can or a bottle: "The can is light-proof and very light, like a small barrel - and that's best for the beer quality. The ecological footprint of the can is also better than that of a disposable bottle, as it is largely made from recycled aluminum."

Frank points out that Ottakringer also pays a lot of attention to sustainability in other ways: "We attach great importance to regionality and grow 105 hectares of malting barley in Vienna with 15 farmers. We grow over 500 tons of barley on the outskirts of Vienna - in Oberlaa, Floridsdorf and Donaustadt."

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