Covid-19: assessing the impact on global beer

At this time (in early March 2020) it is simply too early to project the impact of the pandemic with any certainty. It is impossible to know the extent or duration of the epidemic, nor how economies will react to both actual and collateral disruption. With so far limited economic data to go on, it is nevertheless apparent that manufacturing and supply chains are being disrupted, especially as China has been at the centre of the outbreak.

We expect that the hospitality industry will be badly affected in many countries; and while it is possible that output of some goods can be recovered later in the year, beer consumption once lost, tends to stay lost.

Globally, the on-trade accounts for around one-third of all beer consumption. So if globally three months of on-trade consumption were to be lost, this would represent about 8% of the market.

This is not a forecast, but a reasonable ‘worst case scenario’ at this point in time, based on how events are unfolding. We don’t know how people will react to increased restrictions on movement. Will they go to the pub, if the football game has been cancelled? Will they stay at home and drink beer? Will on-trade outlets be forced to close?

We will be reviewing all key market forecasts regularly and we expect to have more data available in the next few weeks. We plan to publish a more detailed update in the next edition of Plato Logic’s On-The-Hop! Gold review, due in early May.