Cost Pass‐Through in Crisis: Evidence From the German Malt‐Beer Supply Chain

Abstract Global agri‐food supply chains are increasingly exposed to geopolitical shocks, climate volatility, and market consolidation, factors that disrupt traditional price relationships and reshape market power dynamics. Nowhere is this more visible than in the brewing sector, where agricultural raw materials meet complex industrial processing and branded consumer goods. Focusing on Germany, Europe's largest malt and beer producer, this study traces price transmission from malting barley to final retail beer prices between 2010 and 2024. Using a Vector Error Correction Model (VECM) with structural break dummies and different regimes with and without an energy‐related control variable, we identify how external disruptions, most notably the 2015 AB InBev–SABMiller merger, the COVID‐19 pandemic, the August 2021 price surge, and the Russia‐Ukraine war, altered price dynamics along the supply chain. The results show stable long‐run price relationships along the German beer supply chain, but price transmission dynamics differ markedly between a stable period (2014–2021) and a more volatile crisis phase from 2021 onward. External shocks affect upstream and downstream prices differently, with upstream prices reacting more strongly. Energy prices emerge as a key transmission channel in the crisis phase, amplifying volatility and strengthening cost pass‐through across the supply chain. These findings highlight the conditional nature of price transmission and the vulnerability of even consolidated agri‐food chains to sustained external pressure.