The European Food and Drink industry Rodolphe de Looz-Corswarem Hearing on The global financial crisis and industrial changes in the main European manufacturing and services sectors Rodolphe de Looz-Corswarem Secretary General, The Brewers of Europe CCMI meeting, 6th February 2009 European Economic and Social Committee

Secure brewers’ right to responsibly The Brewers of Europe Founded in 1958 It is the voice of the European brewing sector 27 national brewing associations in Europe Over 95% of the beer brewed in Europe Our mission: Secure brewers’ right to responsibly brew and market beer Beer - part of European food heritage and economy

The European Brewing Sector Over 3000 breweries active 440 million hectolitres beer brewed in 2007 25% of the world’s beer production The 4 world leaders are European producers Over 2.5 million jobs generated directly and indirectly Revenue from all taxes → 39 billion € per year 57,5 billion € value added to the European economy each year Source: Ernst & Young – The Contribution made by Beer to the European Economy – 2006 Barth/.Haas Report 2007/2008

The European Food and Drink industry At a glance in 2007 Turnover Employment R&D € 913 billion 4.3 million people 0.24% of F&D output SMEs Number of companies Household expenditure 48.5% of the F&D turnover 99.1% of the F&D companies 308,000 12.6% EU market share of global exports 19.8% (24.6% in 1998) Global markets

International Food & Drinks: exports shares

Major trends on food retail markets Decrease of food in household expenditure Changes in purchase and consumption patterns Market share of 5 TOP retailers are above 50% in 12 MS and above 70% in 5 MS Increasing share of private labels and market share of discounters Market shares of discouters increase Pressure on prices to consumers Limited negotiating power of most manufacturers

Price trends in agricultural markets

Cereal, Bread and Oil Price Indices 2005 - 2008

Key Crisis Challenges Agricultural raw materials: high price volatility Long term up-wards trends of agricultural raw material prices Energy becoming key factor for competitiveness Increased difficulty of access to finance / credits Reticence for providing Risk coverage / insurance by banks Inmediate payment demands Slowing down of exports Challenge to whole supply chain (logistics, packaging, IT, etc) as all businesses suffer from crisis

World beer consumption 2002 - 2008 Source: Canadean Global Beer Trends 2008

Recent trends in the brewing sector Consolidation of the sector Top 10 world brewers 2003 53 % world market share 2008 ≥ 64 % world market share Investments in logistics, production, variety and quality Production efficiency increase (less water and energy) Growing presence of micro-breweries Reductions in direct employment Sales decrease in 4th quarter 2008 – arriving to -8% Impact on restaurants, bars, cafés and events

Brewing sector - Public authorities attitude Increase of beer taxation e.g. France, Finland, Latvia, Netherlands, Poland, Ukraine, UK Research for revenues by other fiscal measures affecting the food and drinks, and the brewing sector Calls for restrictions in advertising and sponsoring Unequal response to brewers’ CSR initiatives in Europe

The brewing sector and the single market Internal market benefits due to, among others: - Transport and tourism facilities - Better coordination in administrative procedures - Common regulations for food products - Easier access to raw materials and consumers Some challenges: Diverging labelling provisions across Europe Call for restrictions in availability and cross-border shopping Different measures for deposit systems and packaging

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