German brewers fear wave of bankruptcies due to energy crisis, call for state aid

The German beverage industry has warned that the rapid rise in energy and raw material costs could push hundreds of companies with thousands of employees into bankruptcy if the government does not intervene. “Whether gas, electricity or fuels, whether agricultural raw materials, packaging or logistics – excessive cost increases, coupled with increasing disruptions in the supply chain and delivery failures, are exceeding the limits of resilience for many companies in the beverage industry,” five business associations from the sector, ranging from breweries to mineral water, said in a joint statement. “The federal government must not leave the companies alone in this situation – it must act,” the statement continued. “Without rapid intervention by the state and without effective aid, hundreds of companies and thousands of employees in the German beverage industry alone will lose their existence.”

It's not just small and medium-sized businesses that face an existential threat but also major industry players, the associations warned. “It is not acceptable for support measures to be denied on the grounds that they would reduce the incentive to save energy and become less dependent on gas,” they continued. “Our companies have made great efforts to save energy wherever possible and to avoid the use of fossil fuels.”

Earlier this week, economy minister Robert Habeck said energy-intensive small and medium-sized enterprises (SMEs) will receive government support to cushion the impact of high gas and electricity costs as soon as possible. “We must now muster all the financial strength necessary to secure the good substance of our economy and jobs in this country and lead them into the future,” Habeck told a meeting of SME associations. Expensive energy is forcing almost one sixth of German industrial companies to reduce production, if not halt it altogether, according to a July survey by the Association of German Chambers of Industry and Commerce (DIHK). Energy-intensive companies, such as those in the steel, paper and glass industries, have been particularly badly hit by energy price inflation.