Brewing beer to defy the crisis in Greece | Business| Economy and finance news from a German perspective | DW | 03.08.2017
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Brewing beer to defy the crisis in Greece

Craft beer is becoming increasingly popular in the southern eurozone nation of Greece. But young brewers such as Nikos Roidos don't have it easy - and not just because of red tape and the ongoing crisis in the country.

When Nikos Roidos (pictured above on the left) strolls through the many delicatessens and wine shops in Thessaloniki, there's hardly anyone who doesn't know his name. The 32-year-old man is one the four founders of Ali-Beer, the first microbrewery in the Greek metropolis.

"We used to be interested consumers, but never thought of brewing beer as a profession back then," he said. His cellphone rings time and again. "This is the main season for us brewers," he added apologetically. "We're also in charge of deliveries; and now that the beach bars in the tourist regions are crammed, we work around the clock."

Roidos and his friends are among the few who can stand their ground in the market with a new product, while most Greek retailers keep grappling with weak domestic demand.

beer bottles

Some 40 microbreweries in Greece are currently competing with the big three in the market - Alfa, Mythos and Fix - Greek beer brands, which have been owned by international companies for years.

Despite a challenging market environment, demand for new Greek beer brands is on the rise. This is one of the reasons why Roidos decided to return to his crisis-hit home country after studying abroad.

Ali-Beer has turned into one of Thessaloniki's best-loved craft beers. You can find it in almost every wine shop and liquor store there as well as in pubs, bars and supermarkets.

"We all studied in the Netherlands and found out there that beer is a versatile beverage," Roidos said. "And then there was this idea of brewing your own beer for the Greek market." He said it had been quite hard to get the money to get going. In the end, a combination of private capital and EU subsidies convinced a bank to grant a credit line for this business idea.

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Waiting for approval

Like all other entrepreneurs, Roidos had to wade his way through the Greek administrative jungle. "We bought the brewery in 2012," he said, "and then we had to wait to get all the necessary permissions and approvals," meaning they were only able to brew their first beer in 2015. He added that running costs had to be covered in the meantime - something that only a few can afford.

Roidos says that he and his friends only turned a profit last year despite the huge demand. High taxes have also been weighing on profits, with the government increasing taxes on coffee, cigarettes and alcohol in 2016 following negotiations with international creditors.

But the fact that Greece has the fourth-highest tax on alcohol in Europe isn't even the main problem, according to Sofoklis Panagiotou, who owns a small brewery called Septem and is vice-chairman of the Greek association of brewers, EEZ. His brands are now known beyond his own country and have won a number of prizes.

"Above all, it's the high corporate tax and obligatory insurance contracts which are making life hard for us - they eat up almost 27 percent of our overall profits." he said. He also mentioned a new solidarity tax introduced by the government recently which brings additional costs. "Of course, everyone suffers from that tax, but it has a particularly negative impact on smaller companies."

shop owner Elina Petrous

Despite all the problems at hand, Greek retailers such as Elina Petrous are witnessing a growing interest in new beer brands.

Inspiration from abroad 

Elina Petrou, who owns the En Olo wine and liquor store in Thessaloniki, makes a point of selling Greek products almost exclusively.

"Regional Greek products are usually high-quality products," she said. "And a new awareness has developed throughout the crisis years among consumers, who simply like entrepreneurs, who haven't turned their backs on Greece when the going got tough but rather developed products for the domestic market."

She pointed out that the new beer brands were part of a larger trend. "The new products are based on traditional idea and recipes, but are nonetheless inspired by foreign flavors and production procedures." Petrou said that's the result of close ties younger Greeks have with other European nations where they had been able to learn from modern marketing and management strategies.

And yet, many would still fail because of a host of financial and administrative hurdles in the country, despite having bright ideas and the right approach to their business, Petrou deplores. She thinks it's unlikely that those obstacles will be removed anytime soon.

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