IN Brief:
- EU beer production fell by 2.9% during 2025, while consumption declined by 3.2%.
- Production is now 8.6% below 2019 and consumption remains 9.2% lower.
- Alcohol free beer grew by 5.9% and now represents approximately one in every twelve beers consumed.
The Brewers of Europe has recorded another contraction in European brewing, with European Union production falling by 2.9% during 2025 and consumption declining by 3.2%.
Those reductions leave production 8.6% below its 2019 level and consumption 9.2% lower. European beer exports also fell to their lowest point since 2014, extending pressure across breweries already managing higher energy, packaging, labour, agricultural, and hospitality costs.
Alcohol free beer moved in the opposite direction, increasing by 5.9% during the year and by more than 38% since 2020. Approximately one in every twelve beers consumed in the EU now contains no alcohol.
Sales through pubs, bars, and restaurants stabilised after several years of decline, although national performance remains uneven. Around 10,000 breweries continue to operate across Europe, supporting an estimated two million direct and indirect jobs.
A reduction in total volume creates a difficult capacity equation because fixed costs do not fall at the same rate. Fermenters, filtration systems, utilities, laboratories, packaging halls, maintenance teams, and distribution infrastructure remain in place even when fewer hectolitres leave the site.
Lower throughput can therefore raise the manufacturing cost attached to each litre, particularly at plants designed around long runs of mainstream lager. Cleaning, quality testing, line starts, and utility loads are spread across fewer saleable units, while broader portfolios introduce more recipe and packaging changes.
Alcohol free products provide growth, but they do not replace lost conventional volume without additional process demands. Arrested fermentation, controlled fermentation, membrane separation, vacuum distillation, and other dealcoholisation methods carry different requirements for flavour, yield, energy, capital investment, and production planning.
Portfolio change reaches every production stage
Many established breweries were designed around a limited number of predictable brands and pack sizes. The current market requires standard strength, low alcohol, alcohol free, flavoured, premium, and seasonal products across bottles, cans, kegs, and multipacks.
Greater variety increases the number of recipes, raw material specifications, labels, closures, cartons, and coding instructions moving through one site. Smaller campaigns may preserve market relevance, yet changeovers and cleaning consume a larger share of available production time.
Removing or restricting alcohol also alters microbiological stability, flavour, and mouthfeel. Ethanol contributes to body and product stability, so alcohol free beers may require tighter hygiene, oxygen control, pasteurisation, cold chain management, or preservative strategies to achieve the intended shelf life.
Capital decisions now extend beyond the brewhouse. A producer can install dedicated dealcoholisation equipment, share systems between products, use external processing capacity, or license production to a brewery with suitable infrastructure, with each route carrying different control, logistics, and volume requirements.
Licensing arrangements are already becoming more prominent. Carlsberg’s expanded agreement with Sapporo gives it long term rights to produce and distribute Sapporo Premium Beer in the UK and Myanmar, allowing established brewing and packaging assets to serve a wider brand portfolio.
Contract and licensed production can absorb underused capacity while sparing smaller brands from large capital expenditure. The model still requires exact control over malt, hops, yeast, brewing profile, sensory standards, filtration, carbonation, coding, and finished packaging.
Packaging demand will change with the product mix. Alcohol free beer is expanding across cans, glass bottles, multipacks, and draught formats, each carrying different oxygen, light, carbonation, coding, and distribution requirements.
More stock keeping units can increase packaging inventory even while total liquid volume falls. Printed cans, labels, cartons, closures, and promotional materials must be held in sufficient quantities to support production, but shorter runs make obsolete stock and forecasting errors more expensive.
Weak exports remove another route for using fixed capacity. Overseas sales often allow large breweries to extend production campaigns and use tanks or fillers beyond domestic demand, whereas declining exports shorten runs and increase the attraction of regional licensing or local partner production.
Agricultural suppliers will also experience the shift through malt, hops, adjuncts, and contract demand. Lower total output does not reduce every input in equal proportion, particularly when premium and alcohol free recipes use different malt bills, hop rates, enzymes, processing aids, or flavour systems.
European brewing is therefore contracting and diversifying simultaneously. Mainstream volumes remain below 2019, while alcohol free growth requires additional development, equipment, quality controls, and packaging complexity.
Breweries with flexible fermentation, filtration, dealcoholisation, and packaging assets will be better placed to absorb that divergence. Plants built around a small number of long campaigns face a harder adjustment as every underused tank, filler, and warehouse location carries a larger cost against the volume it produces.
