Wild West-style breweries

By Audrey SomnardLex Kleren Switch to French for original article

The Brasserie Nationale described the year 2020 as a “annus horribilis” when it presented its annual figures last week. However, the current crisis hides a monopoly-like situation in a sector controlled by only two major players.  

Luxembourg’s market is dominated by two players who share the Horeca market. To establish oneself in the country, an already existing ‘pub licence’ is required in order to be allowed to sell alcohol. The Luxembourg customs have announced that as of January 1 this year, there were 3,267 licences in the country. The figure varies very little because professionals have to get by with this fixed number of licences. The problem is that the Brasserie Nationale (Bofferding, Battin, Funck-Bricher) holds 517 (*) licenses, they claimed during their press conference in early February to be in charge of 2.071 pubs in total, (thanks to their own licences and independantly owned licences), which represents almost two-thirds of the market. The rest is very much in the hands of the competitor, the Brasserie de Luxembourg (Diekirch), acquired by the world beer giant AB InBev in 2002. The two brewers thus act as an intermediary between the owners of the premises, to whom they rent, and the bar operators, to whom they sublet the facility, with more or less binding contracts. The brewers generally provide refrigerators, beer pumps and guarantee annual maintenance. They can also equip the entire bar, depending on the expectations and needs of the operator. In exchange, the latter is bound hand and foot to the brewer, holder of the famous licence. Bars can only sell beers listed in the brewer’s catalogue, or are “strongly” encouraged to do so, with salespeople keeping a close watch.

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