The price isn’t right
On the beer front, the Czech Republic seems to be in a stalemate. No news in public about Budvar and any eventual privatisation. Or about Staropramen and how it is faring under the private equity regime of StarBev. Instead, there are worrying signs that the Czech beer export boom is over.
In 2010 beer production of those breweries associated in the Czech Beer and Malt Association (CSPS) dropped by 7.9 percent over 2009. Draught beer volumes took a major hit. They declined over 12 percent year-on-year.
You could blame it all on a wobbly economy. On the ill-timed rise of excise duty on beer by 33 percent in 2010. On the falling numbers of foreign tourists who in the past downed quite a few litres of Czech beer while on holiday.
Fact is: Czechs still drink a fair amount of beer. Actually, they drink more than anybody else – 155 litres per capita. If consumption dropped to more moderate levels in the long-term health officials would think this a positive development.
However, what makes matters worse for Czech brewers is that along with the fall in beer production, they had to witness a decrease in beer exports by 12 percent in 2010.
Despite the overall drop in beer exports, certain Czech breweries still managed to achieve excellent results. The state-owned Czech brewery Budvar, which has been fighting a long legal battle over the Budweiser brand with Anheuser-Busch, said its 2010 exports rose by 4.3 percent to reach a record high.
Budejovicky Budvar exported 604,791 hl of beer to 58 countries last year, the best result in 115 years. Sales in Germany, its most important market, were up by 4.7 percent to 214,408 hl, also a record.
Sales in the United States, where Budvar has a distribution deal with its U.S. archrival Anheuser-Busch, grew 4.0 percent.
As a result Budejovicky Budwar became the second largest Czech beer exporter in 2010, with its share of the total Czech beer export reaching 21.4 percent.
With total sales of 9.9 million hl in the calendar year 2010 (including licensed production abroad) and exports to more than 50 countries, Plzeòský Prazdroj (Pilsner Urquell) is the largest exporter of Czech beer.
On the domestic market, says SABMiller, Prazdroj maintained its market share with sales of 7 million hl beer – despite a decline in sales of 8 percent. Fortunately, exports of Prazdroj’s traditional Czech brands grew by 6 percent to 0.8 million hl beer (of which 664,000 hl were Pilsner Urquell) despite challenging conditions.
In Germany alone, Pilsner Urquell sold 240,000 hl, which made it the most popular Czech beer brand ahead of Budvar.
Since the beginning of April 2011, Pilsner Urquell has been exported to Poland directly from the Czech town of Pilsen. For the past nine years, Pilsner Urquell has been produced under license in the Polish town of Tychy in response to a capacity shortage in the Pilsen brewery and customs barriers.
Production at Tychy was intended solely for the Polish market, where the beer was distributed, says SABMiller. With the Czech Republic’s and Poland’s accession to the EU, the customs barriers were eliminated. Also, due to further investments to expand the production capacity in Pilsen during past years, the reasons for this licensed production no longer exist. Pilsner Urquell for Poland will now be brewed in Pilsen, SABMiller said in a statement.
