The czech beer market
Post date: Dec 01, 2014 3:17:29 PM
Review: beer market in the Czech Republic
Beer is associated with the Czech Republic just as wine is associated with France and whiskey with Scotland. Pale lager began spreading from the Czech city of Pilsner in the 19th century to become the most popular beer in the world. At present, beer continues to play an important role in Czech culture. Casual hanging out over a glass of beer provides a common opportunity for a discussion among friends. According to the statistics, the average person in the Czech Republic drinks some 140 litres of beer every year, placing the country highest in the world in average beer consumption per person. These quantities are also influenced by the many foreigner visitors who come to Prague every year and drown their sorrows/joys in beer. Most visitors find the time to stop in at one of the traditional pubs and enjoy the best and probably cheapest beer in the world - a 0.5L of the local Pilsner Urquell draught costs as little as CZK 29 (USD 1.5) and beer is usually the cheapest drink you can order in a restaurant, even cheaper than mineral water.
Each pub tends to offer only a single beer brand – due to the different exclusivity rights arranged between pubs and breweries. The breweries provide pubs with branded glasses, furniture, umbrellas and various accessories, as well as beer tap systems, in exchange for their loyalty and for ousting competing breweries. The beer brand served is mostly advertised on an illuminated sign outside the pub, providing important information for potential guests. Major Czech beer brands can be found in pubs all over the country, but smaller brands and those produced by smaller breweries are found mainly locally. Not all beer is consumed within pubs and restaurants and some is purchased for domestic use.
After the global economic crisis in 2008, the amount of beer consumed within Czech households grew to a historical high, reaching 59% of all beer consumed in the country. According to recent surveys, beer remains the most significant social beverage in the Czech Republic because it is mainly consumed together with other people, whether in pubs or at home.
Key players in the Czech beer market
Beer is responsible for 1.6% of the Czech GDP (for purposes of comparison, agriculture constitutes 2.4% of Israel's GDP) and according to the estimates the trade and distribution of beer itself creates some 13,500 jobs. Most of the famous Czech brands are included in the portfolios of six large brewery groups. The three biggest brewery groups are owned by large multinational corporations.
The largest group, Plzeňský Prazdroj a.s., is owned by a multinational giant, SABMiller Plc. and it is the unquestionable market leader with 43% of the market. Its beer brands include the famous Pilsner Urquell, Gambrinus and Kozel.
Other important groups are Pivovary Staropramen s.r.o. (16.8%), Heineken Czech Republic (16.8%), Budějovický Budvar n.p. (4.5%), Pivovary Lobkovicz a.s. and PMS Přerov . There are around 30 small and middle sized breweries that are mostly privately owned. The beer they produce is normally distributed only locally. However, there are exceptions such as the family owned Bernard with its great popularity and wide distribution network, heavily supported by marketing campaigns and charismatic CEO Stanislav Bernard.
A recent trend - microbreweries and radlers
The most Czech beer is still the traditional lager. Nevertheless, Czechs are always keen on trying new brands. The current trends favour so called microbreweries and radler beverages that are quickly gaining popularity. These beers cannot be obtained anywhere else, hence the microbreweries themselves have become desirable destinations for weekend trips and form important local tourist attractions. There are currently over 200 microbreweries in the Czech Republic and thanks to favourable government legislation the number is growing annually. The best known microbrewery is U Medvíků with its convenient location of Prague 1. Yet, the overall market share of the microbreweries is still only around 1%. According to those in the know, the best microbrewery is U Medvídků, located in a hotel basement in the Prague 1 , in the centre of Prague.
Aside from beer from microbreweries, the latest innovation is flavoured-beer (radler). Radler now has about seven different flavours and only 2% alcohol. Radler has not yet acquired a stable position in the market but it has gained incredible popularity in Prague over the past few years. The consumption of radler is significantly dependent on the summer weather. A typical Czech beer drinker would never consider radler as a beer, but the younger generation as well as women can't get enough of it.
The Czech beer industry on the global scene
The Czech Republic is viewed as a country of good beer, creating a global demand for Czech beer. Large quantities of beer are produced in the Czech Republic every year. In 2013, over 2 billion litres of beer were produced. Three quarters were consumed within the country and the rest was exported to Germany (90 million), Slovakia (70 million), Russia (30 million), Sweden (30 million) and other countries.
In addition to multinational beer companies who buy Czech brews, there are also opposite trends. Quite a lot of foreign importers try their luck in this relatively large and saturated Czech market. Importers face serious obstacles in introducing foreign products, since Czech consumers have a broad selection and there do not have much reason to buy imported beer. The first category of imported beers is the low-end category offered at discount prices in hypermarket chains. Cheap beers often come from Poland, Germany and Hungary. The second category includes quality imports such as Guinness, Corona or Stella Artois. Overall imports total 50 million litres and this relatively small number clearly proves the high standards set by domestic breweries.
Drunk driving
Unlike other European countries, the Czech Republic has zero tolerance for drunk driving. Then again, the Czech legislator is tolerant towards alcohol and even encourages this industry. Pubs and restaurants may remain open throughout all hours of the day and night, small breweries pay lower taxes than larger ones, drinking alcohol is permitted in public places and almost anyone can sell alcohol with no special license.
Tourists in Prague
If you decide to experience the night life in Prague’s downtown, you will probably meet many tourists. Most are Germans, English, Russian and French. During the spring months you can also meet groups of English and German tourists who enjoy the late closing hours, together with the Danes and the Dutch. Young Brits like to come to Prague to celebrate their bachelor parties, and if you are lucky you will encounter inebriated groups singing out loud while some stumble occasionally and are dragged to the next pub by their friends. Germans feel at home in Prague since their drinking culture is very similar to the Czech one. You can see young Germans trying their luck and their capacity for beer in Prague's party scene.