Prague, Czech Republic (Photo: Dimitry Anikin on Unsplash)
10 June 2020

Czech beer sales could drop 15 percent in 2020

Czech Republic | Even as pubs have opened their doors, the mood is still gloomy in the brewing industry. Revenue in the on-premise is only 30 percent to 40 percent of 2019 levels, as not all outlets have been able to expand outdoors with beer gardens.

The shutdown on 12 March 2020 has hit the brewing industry hard. Early estimates from the Czech Association of Brewers and Malthouses anticipate draught beer sales plummeted 70 percent during March and April, a fall partially offset by a 15 percent increase in off-premise sales. Overall, they expect that beer production during this period will be 400,000 hl below the same period last year. 

For the full year, beer production is expected to be down by 10 percent to 15 percent, but the final impact will depend on how quickly the economy will be able to open up, the progress of the summer season, and the return of thirsty tourists. 

The government might return those taxes

To help struggling breweries through the lockdown, the Czech Parliament passed a bill at the end of April to refund breweries their excise duties on beer that went unsold because of the coronavirus pandemic.

Media reported that the standard rate of excise duty on regular draught beer is CZK 320 (USD 12.81) per hl. The amount of beer to be liquidated could reach hundreds of thousands of hl. Brewers worried that the taxman might not be very forthcoming in granting the refund requests.

The refunds are subject to the approval of the tax authorities on a per-case basis and there are concerns that they will be primarily received by the large breweries. “It’s more difficult for microbreweries, because they generally do not have administrative support as big breweries have,” explained Martin Pospíchal, a Czech lawyer.

As small-scale producers primarily sell on site, he pointed out that they are just more vulnerable than the larger breweries with more sales options.

Worse still, Jan Šuráň, President of the Czech-Moravian Association of Mini-Breweries (ČMSMP), fears that 25 percent of the roughly 500 Czech microbreweries will close, or be sold due to losses from the coronavirus crisis, the website reports.

In a further blow to the local economy, and especially to the tourism trade, the Czech government has only moderated its ban on foreigners entering the country and Czechs traveling abroad, introduced in March.

On-premise comes back from the brink

The brewing sector has taken an uneven barrage of punches from covid-19, with the virus shutdown hitting the on-premise and microbreweries especially hard, while making a smaller impact on the off-premise sales of the major brewers.

In response to the coronavirus outbreak, the Czech Republic largely followed the lead of Austria: Restaurants were shut down, schools closed, and borders locked. Grocery stores remained open with special morning shopping hours established for senior citizens.

While the number of infections remained quite small at 9,200 (until end of May), the country settled into a period of hibernation.

Czechs largely stayed inside under home quarantine conditions, emerging with their facemasks on to go shopping. The city centres, especially those of the capital city of Prague, were largely empty of the usual hordes of exuberant tourists.

Microbrewers hit hardest

The shutdown of the borders and restaurants had an especially dramatic impact on the nearly 500 microbrewers – defined by ČMSMP as brewing under 10,000 hl beer annually. “We were shut down and just stopped brewing,” pointed out a waiter at the Prague Pivovarske Dum.

These brewers made up 2.46 percent of the country’s beer production in 2019 – a fraction of the 89.06 percent shared by the big brewers producing over 200,000 hl beer annually.

The restrictions also affected small brewers selling “around the chimney” like the Únětický brewery, located just outside Prague. It usually sells 1,300 hl beer per month, with under 5 percent of production going out the door via the brewery restaurant, and the remainder through around 100 pubs.

“It just stopped completely,” said Únětický’s director Lucie Tkadlecova. “The first month was really bad, 20 percent of normal. Conditions changed somewhat in the second month as restrictions were loosened and they got more creative. Pubs such as those serviced by Únětický and the Lobkowicz Šnet started window sales (serving beer through an open side window), enabling them to continue offering food and drinks without sit-down service.”

Window sales and packaging changes were a marked improvement. “We also shifted to selling beer in PET bottles and this enabled sales to be about 50 percent of normal,” pointed out Ms Tkadlecova.

Únětický made the move to 1.5 l PET bottles, the type more commonly used for non-alcoholic carbonated beverages and the budget beer labels. Pivovar Antoš, a microbrewery in the history heart of Slany, sold beer in a mix of kegs, glass bottles, and 1.0 l PET bottles. “All microbreweries bottled beer in PET bottles – the usual size is 1.0 litre,” pointed out Jan Šuráň. Last year, 11 percent of total beer production went to market in PET bottles.

Thanks to switching to PET bottles and window sales, microbreweries managed to find new sales channels and they are now by end-May producing at a 60 percent to 70 percent level. “However, some mini-breweries, especially municipal breweries, which rely on their own restaurant (such as the U Fleků brewery) are suffering from a shortage of customers and are only at 20 percent,” he added.

He forecasts an annual production decline of approximately 25 percent. “The next three months will show who will survive. In the autumn, there will be many mini-breweries for sale in the Czech Republic.”

Czech brewers had a good year in 2019. Overall beer production climbed 1.6 percent to 21.6 million hl, exports were up 4.5 percent, and per capita consumption climbed slightly to reach 142 litres.

Within these positive statistics were some unsettling signs, as volume sales of draught beer fell one percentage point, pulling the on-premise’s share of sales down to 35 percent, with supermarkets and retail outlets clocking in at 65 percent. In addition, the on-premise market is also boosted by the millions of tourists passing through the country.


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