The beer sector, often made out to be a villain in the media, has huge benefits for those willing to peruse the statistics. Beer’s long and strong supply chain – from hops to production to distribution and point of sale – makes it a high contributor to economic development.
Beer is generally locally produced, locally distributed, and locally consumed, resulting in higher direct economic benefits to local communities. Beer also generates important cross-border economic linkages.
Now the first-ever worldwide report to assess the beer industry’s global economic impact has found that one in every 110 jobs in the world is linked – through direct, indirect, or induced impact channels – to the beer sector, and that it supported US$ 555 billion of gross value added (GVA) to global gross domestic product (GDP) in the year 2019.
Given its scale and its impact along a long value chain, a thriving beer sector is a key ingredient for global economic recovery. Authored by Oxford Economics on behalf of the Worldwide Brewing Alliance (WBA), the report also found that the beer industry helped generate US$ 262 billion in government tax revenue in the 70 countries studied, which account for 89% of beer sold worldwide, and supported an estimated 23.1 million jobs.
The report evaluated the beer industry’s global economic impact between 2015 and 2019, including its contributions to global GDP, jobs and taxes.
“This landmark report puts a figure on the scale of our impact on job creation, economic growth and government tax revenue, and across a long, complex value chain, from barley fields to bars and restaurants,” said Justin Kissinger, President and CEO of the WBA.
“The beer sector is a vital engine of the economy,” he added. “The success of the global economic recovery depends on it, and vice versa.”
“Our findings reveal that brewers are highly productive businesses that help raise average productivity across the entire global economy, meaning they have an extensive economic footprint that can make significant contributions to the recovery,” said Pete Collings, Director of Economic Impact Consulting at Oxford Economics.
By brewing, marketing, distributing and selling beer, the beer sector directly created a US$ 200 billion GVA contribution to global GDP and was responsible for 76,00,000 jobs.
By purchasing goods and services from small, medium, and large businesses across the globe, the beer sector indirectly supported GDP, jobs, and tax income for governments. In 2019, the beer sector spent an estimated US$ 225 billion on goods and services inputs, supporting an estimated additional US$ 206 billion GVA contribution to GDP and 10 million jobs.
By paying staff wages and supporting wages in their respective supply chains, brewers and their downstream value chain supported a US$ 149 billion GVA contribution to GDP and 6 million jobs in 2019.
Globally, the beer sector was linked to US$ 1 in every US$ 131 of global GDP in 2019. But the sector’s economic significance was found to be even larger in lower- and lower-middle-income countries (LMICs) than in high-income ones (1.6% versus 0.9% of GDP).
In addition, the beer sector supports 1.4% of national employment in LMICs, versus 1.1% in high-income countries.
The WBA’s Kissinger said, “This deep understanding of our global impact enables the WBA to fully leverage the strength of its sector, its links with industry partners and communities, and to share its vision for a thriving, responsible industry.”
Oxford Economics is a key adviser to corporate, financial and government decision-makers and thought leaders. Its best-in-class global economic, industry models and analytical tools give an unparalleled ability to forecast external market trends and assess their economic, social and business impact.
The WBA involves brewers and brewing trade associations from around the world. Its objective is to share knowledge and best practice amongst brewers and other concerned stakeholders and act as a global, united voice on the integrity of beer and the social responsibility of brewers to a variety of audiences, including international organisations.
The full report can be accessed at https://worldwidebrewingalliance.org/impact
Pix courtesy: Drifters Breweries, Mumbai & Pune