Saturday, April 30, 2016

Beer Declines in Eastern Europe, Venezuela

The pending large beer merger has called attention to the continuing decline of beer in most of the world. People have been drinking less beer in the United States since the 1990s, but it’s a trend that has also been evident in western Europe and, now to a greater extent, eastern Europe. Anheuser-Busch InBev is looking to sell off its eastern European brands mainly because of a shrinking market for beer there.

If beer is a declining product in most of the places in the world that are known for beer, then where is beer consumption increasing? Beer market analysts point to the Middle East, Africa, and Latin America, but in practical terms, it appears the actual growth markets are East Africa, West Africa, and Colombia. Venezuela had been tipped as a growth market, but a currency crisis there that has shortened the work week to two days also means that beer is now in short supply. Polar, which made 80 percent of the beer in Venezuela, shut down manufacturing yesterday after months of being unable to pay for imported ingredients. Other beer makers have also had to cut back, so beer will be a scarce commodity in Venezuela this year. No doubt during the shortage some consumers will lose their taste for beer, so that beer is unlikely to return to its pre-crisis market position.