18 November 2022

Czech breweries Holba, Litovel and Zubr seek investor or buyer

Czech Republic | When the three regional breweries Holba, Zubr and Litovel merged in October 2021 and created the joint-stock company Pivovary CZ Group, they sought cost savings, greater efficiency in distribution and logistics, and even a reduced tax bill. One year later, the group, which is owned by the businessman Karel Kuropata and his company HSK Invest, is in early negotiation with investors. It is even considering a sale. The talks could drag on for months, though, the group said on 3 November 2022.

With an output of 730,000 hl beer in 2021 and revenues of CZK 1.3 billion (USD 53 million), Pivovary CZ Group ranks sixth-largest brewer in the Czech beer market – or perhaps fifth. Lobkowicz Breweries, which is controlled by the secretive Chinese company Citic since 2019, used to hold this rank. But it has not released any annual reports for a number of years, and since 2020 has had to close three of its seven breweries. Most likely, it has relinquished its rank already.

Will Budějovický Budvar submit a bid?

Czech commentators have warned against Budějovický Budvar, the Czech state-owned brewery, buying into the group. However, other observers think it is doubtful that Budějovický Budvar, based in České Budějovice (Budweis), would want to step in. They remind us that when the Samson brewery at the other end of town came up for sale in 2013, Budějovický Budvar was not even allowed to bid for it. In the following year, Samson was bought by AB-InBev.

In any case, Budějovický Budvar sells most of its beer abroad. In 2021, when it sold a record of 1.8 million hl beer, 1.3 million hl were exported, with neighbouring Germany its major destination.

Not a gold mine but still nice to have

2021 proved another record year. Budějovický Budvar increased its net profit by some 10 percent, after a 10 percent hike in 2020. Its net profit reached CZK 337 million (USD 14 million), up from CZK 305 million in 2020. The government expects Budějovice Budvar to contribute CZK 550 million (USD 23 million) to the state’s coffers in 2022.

Because of cost pressures from electricity, gas, hops, malt and packaging materials, Budějovický Budvar hiked its prices by 10 percent in November.

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