Follow the Money: Why does an Oktoberfest beer cost €16?

Sam Fenwick (0:04)

Now, here's a site you don't see very often. England football capter Harry Kane, sitting with his Bayern Munich teammates, wearing lederhosen and drinking beer. A few tenths away, Jamaican Olympic legend Usain Bolt is dancing on stage with a beer in hand.

Where are they? Well, it's Munich's annual beer festival, Oktoberfest. Around six and a half million people come over 16 days, and last year they got through 6.7 million litres of beer. Whether you're an international footballer or a student from Stuttgart, that beer comes in one size, a litre, known as a mass. And this year, it'll cost you nearly 16.9 euros, about $18.

I'm Sam Fenwick, this is Business Daily from the BBC World Service. And today we're following the money in a glass of beer. You paid for a litre of beer, so where did the money actually go?

Servers push through a crowd with a fistful of litre glasses in each hand. There are 14 big beer tents on the Wiesen, that's what locals call the Oktoberfest, and some hold nearly 10,000 people. Walk from one to the next and the price barely moves. Most charge 15.8 euros, the dearest 15.9 and the cheapest 14.90. So wherever you drink, you're paying around $17 or $18 a litre. It's easy to assume then that someone's getting rich here, the brewery perhaps or the city. Before it reaches you, that glass passes through four sets of hands. Each takes a cut, the brewery, the tent, the server and the city of Munich. One of them says it isn't out to make a profit at all. Another takes around half of what you pay. So let's follow the money, starting where it's made.

Only Munich breweries are allowed to sell their beer at Oktoberfest and there are six of them. Some belong to the world's biggest beer companies. Leuvenbräu, for instance, is owned by A, B and Bev, and one belongs to the state of Bavaria. Dr. Jörg Lehmann is director of that one, Hofbräuhaus in Munich, and for him, the festival isn't really about selling beer in a tent.

Jörg Lehmann (2:26)

For us, you can compare it maybe a little bit like a trade show, where our customers are coming for sure in our tent. So I'll be there every day because there's so much customers to meet there. They're coming from the US, they're coming from Brazil, they're coming from Japan. But during these 16 days, I just have to go in my tent and meet all our global customers there.

Sam Fenwick (2:51)

Only about 11% of Hofbräu's Oktoberfest beer is actually drunk at Oktoberfest. Nearly 9 litres in every 10 are drunk somewhere else, and more than half goes abroad.

And Hofbräuhaus doesn't run the tent itself.

Jörg Lehmann (3:07)

In terms of financial figures, the Oktoberfest, it's not that we are running the tent by ourselves. So we are leasing it to a tenant, to an inn operator, which is the family Steinberg, for now about 50 years. And they are operating the tent and serving the food, preparing the food. We're just delivering the beer.

Sam Fenwick (3:31)

Half of the big tents work that way. The brewery holds the contract with the city and brings in a family to run the tent. Like every business, the brewery is paying more for energy and staff this year. Dr. Lehmann says there's a limit to how much of that they can pass on.

Jörg Lehmann (3:48)

Combined with the fact that overall volume is declining, for example, in the year 2025, about 6% of the volume on the German market. So that brings you to overcapacity in the market. And this is putting some pressure in terms of prices.

So it's not that easy to do price increases just due to higher production costs. So you have to digest some of these cost increases.

Sam Fenwick (4:18)

What the breweries don't publish is what they charge the tents for that beer. For that, we have to go inside one.

This is Lervenbroe Tent. Lervenbroe means lion brewery, and it has 5,700 seats inside, 3,300 more in a beer garden, and 16,000 light bulbs in the roof. It's the tent, not the brewery or the city, that sets the price on the menu. And here, a Maß costs 15.9 euros, the top price in the Vessen.

Stephanie Spendler is the landlady. Her grandparents started at Oktoberfest in 1953, and this is her 40th. The night before it opens, she likes to have the place to herself.

Stephanie Spendler (5:03)

I prepare the Oktoberfest nearly all year long, and Friday evening before the big festival starts, I enjoy the moment of silence in our big beer tent. And at that time, it appears to me like a cathedral, and it's just the night guard and me. And I always ask the night security man to switch on the lights for me, and then I drink a glass of wine. And I just enjoy the big beer palace and the silence.