The introduction of the Euro and an economic slowdown are at the root of a close to 5% slowdown in German retail coffee sales January and February 2002, according to the country's third largest roaster said on Wednesday.

Hermann Arnold, CEO of Melitta Kaffee GmbH said March and April German retail coffee sales will be down on the year but could not stipulate a precise figure on the fall.

He said that as consumer confidence returns consumers would return to the classic retail chains, which they had deserted for discouters in the difficult times. However he also believed that the overall market for ground coffee would not reach the levels of last year.  "I believe that the overall market will be weak," he added.

Germany's market is dominated by ground coffee, not instant brands. German coffee prices are at their lowest level since the second world war but Arnold hoped retail prices would rise in 2002, thanks to increases on international markets.