Brace for change: there might be a new player in the beer market

This article is part of ‘Beer Wars’, a joint investigation by the Luxembourg Times, Luxemburger Wort and Contacto.

Chapter 1 – Dominance of Luxembourg’s biggest brewers under scrutiny

Chapter 2 – Why your favourite bar is struggling to stay open

Chapter 3 – Your beer’s dirty little secret: it’s cheaper next door

The arrival of a new competitor to serve bars and restaurants – under the watchful eye of an EU-appointed monitor – could loosen the grip that Luxembourg’s two brewing giants have long held over beer prices. 

Things surely seem to be heading that way. 

Four months ago, the European Commission told Luxembourg’s biggest brewery, Brasserie Nationale, that it must sell off assets to a new competitor to buy Boissons Heintz, its main rival for delivering beer and other drinks. 

That hasn’t happened yet, Georges Lentz, owner of Brasserie Nationale, told this newspaper. 

Pressure now mounts on Brasserie Nationale deliveries arm Munhowen to shed Heintz’s truck fleets, storage hubs and its exclusive client base servicing hotels, restaurants and cafés.

AB InBev, one of the world’s biggest brewers which also owns the Diekirch brand in Luxembourg, had opposed the deal. Heintz used to be the official distributor of Diekirch and thousands of bars in Luxembourg were contractually forced to buy from them, as investigated by our team.

Times are changing for Luxembourg’s beer market © Photo credit: Christophe Olinger

The deal merging Boissons Heintz into Munhowen faces a confidential deadline imposed by European Commission competition authorities, a European Commission spokeswoman confirmed. They approved the Heintz purchase in July, yes, but conditioned on the spinoff.

After a certain point, an outside agent can step in and sell the Heintz assets even if it creates a loss for Munhowen, according to the public version of the commission’s merger analysis released in September.

“If nothing happens, the commission can always take a new decision afterwards. [The] merger could be unwound in principle,” said Gabriel Bleser, an attorney specialising in competition and antitrust law at JBV & Partners in Luxembourg.

Sell or not, competition is arriving

No matter what happens, a sale of Boissons Heintz’s distribution to hotels, restaurants and cafés  – the so-called Horeca sector – seems definitely in the future for Lentz and his daughter, Munhowen CEO Isabelle Lentz. 

The new rival could expect up to 30% of the Luxembourg market for drinks distribution formerly held by Heintz, the European Competition Authorities estimated in their merger analysis.

Failing to sell the Horeca operations of Boissons Heintz’s business to an EU-approved buyer within the secret timeline that EU authorities have set would lead to a potential “fire sale,” the European Commission’s merger agreement details said.

The distribution sector will likely have a new competitor in Luxembourg © Photo credit: Christophe Olinger

An appointed trustee would then be tasked with balancing the “legitimate financial interests” of Munhowen while shopping the Heintz assets “without a minimum price being set (including a negative price, if the latter is deemed appropriate and reasonably required),” the merger details stated.

 “As there is no official statement on this yet, we do not wish to comment officially”, said Steve Martellini, Secretary General of Horesca, the Luxembourg lobby for the hospitality sector. Still, he acknowledged the association is watching developments with interest. 

Times are a-changing

The deal merging Boissons Heintz into Munhowen hasn’t happened so far because the small size of Luxembourg and the Greater Region is seen as too small in comparison to the costs of any potential investors taking over the shed assets, the Bofferding producer’s boss Georges Lentz told our reporters.

Brasserie Nationale may be a giant in Luxembourg, “but we’re damn small,” Lentz said. “We are in a competition with the big boys.”

Even with a market that includes sales in adjoining regions of Belgium, France and Germany, the Luxembourg brewer is tiny compared to Belgium’s AB InBev holding more than a quarter of the worldwide beer market, he said.

Luxembourg in 2023 had the smallest beer production among 26 European countries for which data was collected by Brewers of Europe, the industry’s Brussels-based lobby group.

Luxembourg imported twice as much beer as it exported in 2024, data from national statistics agency Statec shows.  Lentz says the scenario is even more difficult. Once all beer sold in grocery stores as well as consumed in bars is tallied, imported brands comprised nearly two-thirds in 2023, due in part because half of Luxembourg’s population is from another country, he said. 

Georges Lentz’ Brasserie Nationale might be the top player in Luxembourg, but most beer is imported © Photo credit: Christophe Olinger

Luxembourg imported twice as much beer as it exported in 2024, data from national statistics agency Statec shows.  Lentz says the scenario is even more difficult. Once all beer sold in grocery stores as well as consumed in bars is tallied, imported brands comprised nearly two-thirds in 2023, due in part because half of Luxembourg’s population is from another country, he said. 

Brasserie Nationale produces almost a quarter of the beer sold, Brasserie de Luxembourg 7% and other labels 7%, the Bofferding baron told our reporters. We could not independently verify this information. So Lentz is wondering how long Luxembourg’s local No. 1 can swim in a frothy beer ocean dominated by bigger fish and whether Brasserie Nationale will eventually have to give up carrying the Grand Duchy’s banner. 

“Competition is tough. The majority [of sales] is foreign beers. Shall we stay in Luxembourg? Shall we just sell it off?” the managing director of the brewery said during an interview at company headquarters in Bascharage.

Small players push for licence reform

Competitors and hospitality establishments also want changes in the dominance Brasserie Nationale and Brasserie de Luxembourg enjoy over who gets a state-issued licence to sell alcoholic drinks.  

The Luxembourg Competition Authority said in September that it is investigating the Grand Duchy’s two largest beer manufacturers for the control they have over the local beer market. 

Betty Fontaine manages Brasserie Simon, the third-largest brewery in the country. © Photo credit: Caroline Martin

It is not unusual for licences to cost tens of thousands of euros, said Betty Fontaine, who runs Luxembourg’s third-largest brewery. She has even heard of prices as high as €60,000. Brasserie Simon itself has paid “exorbitant prices”, she said, without specifying a number paid by her brewery.

The average selling price of a licence in 2011 was around €35,000, the Luxembourg Chamber of Commerce reported that year. “This has been an issue for decades,” Fontaine told our team. 

Brasserie Nationale and Brasserie de Luxembourg hold 43% of the 2,767 alcohol licences in active use, including 1,147 that can be transferred from one location to another rather than being tied to a specific address, Finance Minister Gilles Roth said in  response to a parliamentary question this year.

Luxembourg industry lobby Horesca has long sought changes to the existing alcohol licencing system, which is projected to generate €600,000 in tax revenue in 2025. Beer prices rose more than 35% in recent years even though prices fell in neighbouring countries, the association wrote in a letter to Roth earlier this year.

Edmons Liebens produces Clausel beers in Lëtzebuerger Stad Brauerei © Photo credit: Anouk Antony

Luxembourg industry lobby Horesca has long sought changes to the existing alcohol licencing system, which is projected to generate €600,000 in tax revenue in 2025. Beer prices rose more than 35% in recent years even though prices fell in neighbouring countries, the association wrote in a letter to Roth earlier this year.

Luxembourg’s government eventually will respond to pressure to change the current alcohol licencing system, which allows required state  licences to be owned in private hands and then bought and sold, Edmond Libens, whose family-run Lëtzebuerger Stad Brauerei produces Clausel beers, believes. 

There are two sides to this story. On the one hand, the two major breweries – who own the most  licences – largely dictate what bars and restaurants will serve. Clausel beers were once available in about four dozen bars around Luxembourg, but pressure from the two bigger brewers has cut that to about 20 today, Libens said.  

On the other hand, broadly opening Luxembourg’s beer business could risk Germany’s Bitburger and ABInBev swamping the Luxembourg market with brands they can make so much more cheaply because of their massive scale, the producer of Clausel beers said. 

“If the markets open it means more competition, which means that some prices will drop and that’s not that good for small breweries like ours,” he said. “But on the other hand, it means that small breweries like ours have to find another way to produce more and different kind of products.”

At the end of the day, Luxembourg’s beer duopoly is under fire. Our Beer Wars series exposed the struggle for taps in bars and cafés. Today, the fight shifts to your wallet. Change is brewing – and the next war will be over price.