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18.09.2019

UniCredit Oktoberfest Analysis: Despite Price Increase New Record for Beer Consumption expected

  • Average price per “Mass” (one litre) 2019 at EUR 11.60, 36 cents or 3.2 percent more than in the previous year
  • UniCredit Wiesn Visitor Price Index (WVPI) up by 2.7 percent in 2019
  • Beer consumption already reached a record level of 7.9 million litres in 2018

At noon this Saturday, 21 September 2019, they will again declare “O’zapft is” (the keg has been tapped) in Munich when the gates will be opened for the 186th Oktoberfest. As in previous years, prices at the “Wiesn” will rise again this year, although not as strong as in the previous year. One Mass of beer (one litre) costs an average of 11.60 euros in 2019 - that is 36 cents or 3.2 percent more than in 2018. The Wiesn Visitor Price Index (WVPI), traditionally calculated by UniCredit, also shows another increase - this year by 2.7 percent (previous year: 3.3 %(. It is based on the prices for two Mass of beer, half of a roasted chicken (or Hendl in the local dialect) and a public transport ticket (return ticket) and is part of the UniCredit analysis "Oktoberfest 2019: New record high in beer liquidity?", published today. While the price of a public transport ticket remained unchanged, the price of a chicken increased, just like the beer price, by 3.2 percent compared to the previous year. Thus, the Wiesn inflation in 2019 is considerably outpacing consumer price inflation in Germany which remained well below 2 percent.

Decreasing percentage of younger Wiesn visitors in the past
However, the increased prices do not discourage the visitors of the Oktoberfest: "Overall, the rising beer prices do not seem to have an influence on the beer consumption of the visitors", says Dr. Thomas Strobel, economist at UniCredit and author of the analysis. "After beer consumption surprisingly declined in 2013, the growth trend that we have observed since the mid-1990s continued in 2018.”

One possible explanation for this trend is that Oktoberfest beer could resemble a so-called Giffen good. The rationale behind a Giffen good is that, as the price of such a good increases, the consumption of expensive substitutes becomes less affordable - especially when alternative goods, such as in a beer tent, are hardly available.

Another explanation for the beer consumption conundrum could be a shift in the age structure of Oktoberfest visitors. Between 2000 and 2014, the number of Oktoberfest visitors under the age of 30 dropped by 17 percentage points, while the share of Wiesn visitors over the age of 30 increased by 43%. As older visitors are typically wealthier, they can afford the yearly increase in beer prices at the Oktoberfest more easily.

In relative terms, Oktoberfest beer is most expensive for Brazilians, beer is cheap for US Americans and Australians  
The Oktoberfest, which has its origins in 1810, continues to have enormous international popularity. Foreign visitors to the Oktoberfest constitute 14% of total attendees. Comparing the Wiesn beer price with the price of one Mass of beer in the visitors’ home countries, it becomes clear that visitors from Italy, Brazil and Austria spend more on each beer at the Oktoberfest than they would spend on an equivalent measure of beer in their home countries. Moreover, in relative terms, the Oktoberfest is most expensive for Brazilians, who pay an 81% markup in comparison to the price they would pay for a Mass of beer at home. In contrast, visitors from the US and Australia spend around 20% less on a beer at the Oktoberfest than they would pay in their home countries.

Assuming good weather, it is unlikely that neither current geopolitical uncertainties nor the current price development will prevent another record year.

About UniCredit
UniCredit is a successful pan-European commercial bank with a fully integrated Corporate & Investment Banking business. It offers its clients a unique network in Western Europe as well as in Central and Eastern Europe, combining in-depth local expertise with international reach. UniCredit serves and supports 26 million customers worldwide, giving them unique access to leading banks in 14 core markets and 18 other countries.

Enquiries:
Nicholas Wenzel, Head of Media Relations HVB
Tel.: +49 89 378 44959
E-Mail: nicholas.wenzel@unicredit.de