With bars and restaurants closed, Czech microbreweries have had revenue cut and been left with soon-to-expire beer.
ADVERTISEMENTCzechs are among the world's biggest beer drinkers and a call has gone out for them to step up amid the coronavirus crisis.
Hundreds of the country's microbreweries face a bleak future after a nationwide shutdown of bars and restaurants began in mid-March.
It has deprived the craft brewers of customers, starved them of revenue and left them with a stock of soon-to-expire beer.
“We sell our beer in our own pub, and to one other bar, but because they are all closed, it’s a problem” said Premysl Lexa, head brewer at Moritz Inn brewery.
The Moritz Inn, based in the east of the country, is one of almost 170 microbreweries that have signed up to ZachranPivo, or “Save The Beer,” a recently-launched initiative that allows small brewers to sell their surplus stock before it spoils.
A user-friendly website helps customers locate their nearest brewery, and make an online order for collection.
As of March 31 there are 5,970,750 bottles of beer from 169 small breweries that “are waiting to be rescued”, its website states.
According to the Czech Republic’s microbreweries association, a quarter of these small, often family-run businesses will not survive the ensuing crisis.
But that forecast was made a week ago.
“I am even more pessimistic today,” said Michal Pomahac, the owner of the family-run Kytin brewery near Prague and co-founder of the Save The Beer initiative.
His own brewery has lost 80 per cent of turnover since restrictions began in mid-March, Pomahac said, although that is not as bad as breweries that only produce beer for kegs, some of which have seen their entire turnover disappear in a matter of weeks.
Many breweries, in expectation of a soaring trade at Easter in early April, began producing large batches in past months. But forced closures of bars and restaurants means most breweries are now without clients.
Unable to sell draught beer in barrels or kegs to such venues, most have had to instead sell bottled beer to individual customers. The larger breweries, meanwhile, have the contracts to keep their brands well-stocked in supermarkets. Yet for many microbreweries producing unfiltered craft beer, with a short shelf-life, it’s a race against time.
The Czech Republic had the seventh largest beer industry in the EU in 2016, and a survey last year found that as well as six large breweries, there are almost 30 mid-sized ones as well as 440 microbreweries, up from 160 in 2012.
Czech firms exported a record-high 5.16 million hectolitres of beer last year, a rise of 11 per cent from 2018, according to data from the Czech Beer and Malt Association. Beer exports were worth about €290 million in 2018. Plzensky Prazdroj, the country’s largest brewery, was reportedly the tenth biggest taxpayer in the country that year.
But beer is more than just business for Czechs. For years, the country has retained the mantle of most beer consumption per capita in the world, with each Czech consuming on average 143 litres of beer per year, according to a 2016 Global Beer Consumption report by the Kirin Beer University.
Taste for the amber nectar, however, has created some problems for the authorities as they try to enforce a nationwide lockdown. Local news reports reveal that bars have opened despite government regulations, while some have tried to get around new restrictions by selling their beer through windows for consumption outdoors. This technically abides by the regulations, though the authorities have cracked down on such practices.
ADVERTISEMENTOne bar in Uherske Hradiste, in the southeast of the Czech Republic, was reportedly fined three million koruna (about €110,000) last week after serving customers in its beer garden.
So far, however, most reports suggest that Czechs are closing sticking to the emergency regulations and support the government’s severe restrictions on free movement, which Prime Minister Andrej Babis has extended until April 11. The number of COVID-19-related deaths rose to 23 on March 31, with 3,002 confirmed infections after more than 43,000 tests.
Most economists now expect the Czech Republic to enter a recession this year, though by how much markets will contract remains uncertain. Like in other sectors of the economy, the bigger firms in the beer industry are likely to better weather this crisis than smaller businesses.
The Japanese beverage-giant Asahi, for instance, owns Plzensky Prazdroj, the country’s largest brewery and controller some of the country’s top beer brands, like Pilsner Urquell, Radegast and the non-alcoholic Birell.
Tomas Mraz, sales director of Plzensky Prazdroj, says that the company’s breweries “are fully operational” at the moment. While the supply of beer into tanks and kegs has been stopped completely, he said, they have increased the distribution of canned or bottled beer for stores and retail chains.
ADVERTISEMENT“It is too early now to evaluate the impact of the current situation on our business and the entire segment,” Mraz added.
A worse fate will likely befall smaller firms. A survey by the Czech Chamber of Commerce last week found that seven percent of all companies have made redundancies or temporary layoffs because of the COVID-19 crisis, though that rose to almost a fifth of firms in the restaurant and bar sectors, according to Dnes, a local newspaper.
Like other European states, the Czech government has announced a considerable financial stimulus package to help businesses and households manage during the crisis, yet confusion abounds as to how small firms can access the emergency money and how long it will take for distribution.
“The worst thing is that no-one can see the end of this,” said Pomahac, of the Kytin brewery, who predicts some restrictions will remain in place for three months. “And even if they open the pubs,” he added, “no-one will be eager to gather in closed spaces…There is almost zero support from the Czech government, so most of the venues will simply run out of money.”
