‘Scorching’ inflation overshadows Germany’s iconic Oktoberfest return
Oktoberfest is back in Germany after two years of pandemic cancellations – the same bicep-challenging beer mugs, grease-dripping pork hocks, dinner-plate-sized pretzels, men in shorts in leather and women in traditional low-cut dresses.
But while brewers are more than happy to see the return of the Bavarian capital’s touristic centerpiece, they and visitors are under pressure from inflation in a way hardly imaginable the last time it hit. is held in 2019.
On the one hand, the 1 liter (2 pint) beer mug will cost between 12.60 and 13.80 euros ($12.84 and $14.07) this year, an increase of about 15% compared to to 2019, according to the official Oktoberfest homepage.
The event opens at noon Saturday when the mayor of Munich draws the first barrel and announces “O’zapft is”, or “It’s taped” in Bavarian dialect.
For German brewers, the rising costs go far beyond the simple price of a round on the festival’s long wooden benches. They face higher prices throughout their production chain, from raw materials such as barley and hops to finishes such as beer caps and packaging materials.
It’s a mirror image of the inflation running through the economy: Skyrocketing natural gas prices caused by Russia’s war in Ukraine are increasing what businesses and consumers have to pay for energy, while the recovery of demand following the pandemic is making parts and raw materials hard to come by.
Brewing equipment is often fueled by natural gas, and prices for barley malt – or grain that has been able to germinate by wetting it – have more than doubled, to more than 600 euros a tonne. Glass bottles increased by 80% as glassmakers pay more for energy. Bottle caps have increased by 60% and even glue for labels is scarce.
“The prices for everything have changed dramatically this year,” said Sebastian Utz, chief technician at Munich’s historic Hofbraeu brewery, whose roots in the city date back to 1589. “To brew beer you need a lot of energy…and refrigeration.And at the same time, we need raw materials – barley malt, hops – where purchases have increased in price.
The costs of everything – cardboard, stainless steel for kegs, wooden pallets, cleaning products to keep brewing kettles spotless – have gone up.
“These are prices the German brewing industry has never seen before,” said Ulrich Biene, spokesman for historic family-run Veltins Brewery in Grevenstein, which is not among the brands sold at Oktoberfest.
Inflation reached an annual rate of 7.9% in Germany in August and a record 9.1% in the 19 countries that use the euro. The rise in consumer prices in Europe was fueled above all by the restriction of natural gas supplies by Russia, sending prices skyrocketing. This affects electricity, as gas is used to generate electricity, and the cost of a host of industrial processes that run on gas, such as the manufacture of fertilizers, glass and steel. Farmers are also seeing higher costs for heating buildings and fertilizing crops.
All of this is built into the prices of the things people buy, and those higher prices reduce their purchasing power.
Inflation is “red hot in Germany” and could approach 10% by the end of the year, said Carsten Brzeski, chief eurozone economist at ING bank. The rate is expected to fall next year as consumer demand weakens, but that’s cold comfort today.
Either way, Oktoberfest is a much-needed boost for Munich’s hospitality and catering industry.
“It’s wonderful,” said Mayor Dieter Reiter. “You can see the enthusiasm has returned.” He played down concerns about such a significant event during the pandemic, saying the spread of COVID-19 is “no longer the deciding factor” and adding, “Let’s see how it goes.”
Some 487 beer breweries, restaurants, fish and meat grills, wine vendors and more will serve revelers at Oktoberfest, and opening hours will be even longer than in the past, with the first beer tents opening at 9 a.m. and closing at 10:30 p.m. Last orders will be taken at 9:30 p.m.
In the years leading up to COVID-19, around 6 million people visited the celebrations each year, many of them dressed in traditional Bavarian clothing – the women in Dirndl dresses, the men in Lederhosen or leather pants up. ‘on the knees.
Oktoberfest, first held in 1810 in honor of the marriage of Crown Prince Ludwig of Bavaria to Princess Theresa, has been canceled dozens of times in its more than 200-year history due to wars and pandemics.
—AP Business Writer David McHugh contributed from Frankfurt, Germany.
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