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Beer Connects Europe with the World

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Tiffany Tsui

on 8 December 2016

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Transcript of Beer Connects Europe with the World

(Data Source: World Bank 2012)
Over recent decades, there have been major changes in beer consumption around the world. The important global dynamics that impact on the consumption trends and patterns of beer include income growth, demographics, urbanization, trade, migration and international mobility, foreign investments, and regulatory and other constraints. Driven by the changing global demand, trade has grown substantially in volume and value, which in turn has significant effects on the global beer consumption trends and patterns.
Global Dynamics
The EU is home to more than 7500 active brewing companies and boasts a history of brewing culture and heritage that dates back thousands of years. The EU is also home to the headquarters of the world’s largest brewing companies.

Over the 20 years between 1993 to 2012, the trading ties of EU28 members have grown to 123 countries outside of EU. Furthermore, the EU countries are among the top three import partners of no less than 97 countries outside of the EU.

Beer Connects Europe with the World
Beer Consumption Trends.
With the still huge and growing demand in third countries both for investment and trade, there is untapped potential for sustained growth of the European brewing sector. (Data Source: Brewers of Europe 2012)
EU expansion over the last two decades has created one of the biggest economies and trading entities in the world. EU trade policy matters not only to the EU, but also to the world. With the growing importance of regional trade blocks such as ASEAN and NAFTA, EU has sustained efforts in developing regional and bilateral preferential trade partners.
EU Expansion
& International Trade Policy

Over the past two decades, there have been major global transformations with significant impact on the consumption trends and patterns of beer.

European-based brewers are now focusing on trends in the emerging markets: income growth, positive demographics and urbanization.

As the European brewers demonstrate, the continued prosperity of the EU depends on connecting to the growth of developing countries and therefore it is ever more important for policy makers and business leaders to understand the dynamics and interplay of the global changes.

Rise of China in the past, Africa important for the future
The importance of the European brewing sector in European trade with the rest of the world is demonstrated by the central position and structural connectedness of European brewers for both trade and investment.

Beer-related trade and investment do not only represent an economic exchange, but more importantly an exchange of culture and prestige. Therefore the global beer network can be a good indicator of the openness of countries in facilitating knowledge, people and investment flows*. The European brewers are powerful world players leading the way in investing into emerging markets, contributing to growth and prosperity for both Europe and the third countries.

EU28 is centrally connected for both trade and investment
The European brewing sector is increasingly vibrant. This is reflected in the growth of small and medium sized brewers in the EU as well as innovation within the category by small and big brewers alike.

The EU brewing sector has benefitted from the EU trade policy of liberalization and opening new markets, and vice versa, the open and global nature of the EU brewing sector contributes to the EU policy agenda of remaining an open and transparent economy.
Trade contributes to growth and jobs in and outside of EU
EU’s importance for the WTO and regional agreements
Focus on sustainable development for future growth strategies

Further growth both within and outside of EU will very much rely on continued trade liberalization measures, strengthening economic relations as well as supportive legislative and governance frameworks that enable the sustainable development of the whole supply chain covering issues ranging from employment, taxation, sustainable production and consumption, to environmental policy, food safety and food security.
Barley Trade Flow Map (2012). Quality barley suitable for beer malting is only grown in a few places on earth. To ensure supply chain security for the global brewing operations, both trade policy to facilitate agricultural trade and the emphasis on local sourcing are important. (Data source: World Bank 2012)
Global Overall Water Risk.
Identifies areas with higher exposure to water-related risks. (Map Source: World Resources Institute Aqueduct 2014)
Topological representation
of the global trade network of beer grouped by region showing that EU28 member countries are centrally connected with the rest of the world through trading ties. The lines represent the traded quantity in hectoliters between two countries. Only trade linkages with values greater than 50,000 hectoliters (summed from 1993 to 2012) are shown. Intra-EU28 trade linkages are included. (data source: FAOSTAT)
Global Beer Investment Network (as of 2014).
The EU is home to the headquarters of the world’s largest brewing companies. The EU brewers are the global front-runners in terms of investments in emerging markets such as China and various African nations.
Beer Connects Europe with the World
Supported by:
Graphical Design: Alexandra Tsatsou
Industry Advisor: Wil Duivenvoorden
Tiffany S.W. Tsui
A Report commissioned by The Brewers of Europe and conducted by Royal HaskoningDHV
Global Significance of
Trade and Investment by the EU Brewing Sector

(1993 – 2012)
Over the 20 years
Between 1993 and 2012, a total of
Annual traded quantity around the world has
There are now around
7,500 active
breweries in the EU,
double the number in 2010 and with
over 1500 breweries opening since 2013.
123 countries
the trading ties of EU28 countries extended to
between 1993 to 2012,
Facts at a Glance
representing around 330 million hectoliters, or 30 billion US dollars
40% of the world total
accounted for
world and EU28
Trading between the
(the above figures exclude intra-EU trade)
with an equivalent value of about 80 billion US dollars, was traded around the world.
830 million hectoliters of beer,
annual growth of 8%.
with an average
70 million hectoliters in 2012,
from 17 million hectoliters in 1993
to close to
more than tripled in 20 years,
outside of the EU
The sizes of the circles represent the total import/export quantity (summed from 1993 to 2012) of a given country, and the thickness of the lines represent the trade linkage value as expressed in hectoliters traded between two countries. Only trade linkages with values greater than 10,000 hectoliters are shown. Intra-EU28 trade values and linkages are NOT included here. (Data Source: FAOSTAT 1993 to 2012)
Global Income Growth
. The combination of trade liberalisation and subsequent income growth over the past two decades has driven growth of beer production and consumption in countries including Brazil, China and Russia. From close to zero beer consumption in the 1980s, China now consumes 20% of all beer in the world.
Global Demographics.
Over the coming decades, Africa will experience the most rapid population growth. By 2050, total population in Africa will double from today adding another 1 billion to the total. China’s population will age rapidly over the coming decades while India and the African continent are expected to maintain relatively young populations.
Urbanization and Global Cities.
Urbanization and especially the rise of ‘global cities’ have important implications for business strategy. Metropolitan and cosmopolitan cities are where the trend setting global citizens gather. This means fundamentally different marketing and distribution strategies focusing on premium products targeted at urban centres with more personally appealing marketing channels and distribution channels.
Trade Policy.
Preferential trade agreements effectively resulted in the reduction of import tariffs. However, in particular non-tariff barriers remain an important issue especially for small and medium European Union-based brewers that rely on export for international expansions.
The combination of future economic development, demographic changes, increasing urbanisation and consumption patterns points to Sub Saharan Africa to be crucial to future growth for the global brewing industry, especially in terms of investment targeting the mid to long term.
Male population aged between 18-44, projected changes between 2011 and 2025. (Data Source: World Bank 2012 Data)
In 2012, the EU brewing sector was responsible for 2.3 million jobs in the EU across the supply chain from the agricultural sector to the hospitality sector. The brewing sector also contributed a trade surplus amounting to 3 billion euros in 2012
The EU brewing sector has grown exponentially with the EU internal market and supports the EU’s commitment to further developing the internal market.

Going forward, the continued success of the EU brewing sector relies on the EU connecting its internal market to the rest of the world.
Beer Traded (hl) between EU and the Rest of the World (from 1993 and 2012)
Bound Tariff on Beer Imports (2015)
*Source: Tsui, T.S.W., Wall, R.S. & Täube, F. (2016). A Beer Index for Interna onal Food Security? A Co-evolu on Study of Global Trade & Investment Business Networks. Presented at the Academy of Interna onal Business (AIB) Annual Conference 2015, Bangalore. Submi ed to the Journal of Interna onal Business Studies for peer review.
Global Significance of Trade and Investment
by the EU Brewing Sector
(1993 – 2012)
Supported by
Graphical Design: Alexandra Tsatsou
Industry Advisor: Wil Duivenvoorden
Global Significance of Trade and Investment
by the EU Brewing Sector
(1993 – 2012)
Author: Tiffany S.W. Tsui
A Report commissioned by The Brewers of Europe and conducted by Royal HaskoningDHV
Beer Connects Europe with the World
Innovation, resilience and entrepreneurship
The European brewing sector has demonstrated its resilience, entrepreneurship and global leadership and will continue to innovate and lead the global beer development in the future!
New styles of beer and flavours are constantly introduced. Low and zero % alcohol beer is also a growing trend, allowing consumers to enjoy beer at different moments.
Distribution of breweries in European towns and cities (Data Source: Brewers of Europe statistics)
benefit local rural
Local sourcing
European brewers are major investors in emerging countries. Beer is not just traded; European brewers commonly invest in local production with locally sourced raw materials for local brands. This contributes directly to development and prosperity in emerging countries: through employment, investment in infrastructure, improving supply chain management, and commitment to sustainability through supplier and human rights codes, adhering to global standards.
(Data Source: World Bank 2012)
(Data Source: World Bank 2012)
(Data Source: WTO Trade Agreement Database)
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