Wednesday, 6 January 2010

Czech beer feels impact of 'free market'

When the Czech Republic enthusiastically joined the European Union it didn't expect its world-famous beer Pilsner Urquell -- the original Pilsner -- to be hammered by price cutting in neighbouring Germany. As a result of cross-border trading, visitors to some Czech stores and restaurants find bottles of Pilsner Urquell bearing German labels. This is the result of lower wholesale prices in Germany encouraging some Czech companies to re-import the beer in order to boost profits.
The price of Pilsner Urquell has been rising in the Czech Republic for several years. The suggested retail price in 2000 was 14.6 Crowns and this had risen by 2009 to 19.9 Crowns. Jiri Maracek of the Pilsen brewery said: "There's no way we can dictate retail prices. The recommended price in Germany is 75 cents, which is roughly 20 Crowns."
That makes the German price equivalent to the Czech price but it doesn't take into account the fact that special promotions in Germany can lead to drastically lower prices, which are the main reason for re-importing the beer from Germany. Value added tax is lower in Germany than the Czech Republic and individuals can import up to 100 litres of beer without having to declare it to to Customs.
According to data from the Czech Statistical Office, the value of all beer re-imported from Germany was 62 million Crowns in 2009.

9 Comments:

Blogger The Beer Nut said...

Happens here too. I've seen bottles of Cork-brewed beer in Dublin (Miller, by coincidence) bearing the label of its UK distributor. And it was probably bought at retail price in the UK too -- still cheaper than wholesale south of the border.

6 January 2010 at 18:37  
Anonymous Anonymous said...

So what?

6 January 2010 at 22:08  
Blogger Woolpack Dave said...

I'd generally agree with Mr Anonymous - so what?

OK, there is the problem of different tax systems in various countries that can cause problems, it happens between us and France. However importing illegal contraband should be protected by law and also the EU is supposed to be harmonizing taxation to help reduce this effect.

At the end of the day there often ends up being differentials in pricing that can cause al sorts of goods to be transfered seemingly bizarrely between countries. I know of a Rumanian who bought a car in Germany because he could buy it cheeper, that seems bizarre to me. In any event the economics will balance out in time, that's the free market for you. I doubt the free market will be guilty of destroying anything except what the people don't want.

6 January 2010 at 22:25  
Anonymous Steve said...

It's sometimes difficult to use what's happening in the beer industry to make old-fashioned, left-wing political points, but somehow you manage it. Well done!

7 January 2010 at 10:28  
Blogger Johnny Norfolk said...

Beer in a very low price in Germany and you can now smoke again in the small pubs. Most Germans I know are resistant to imported beers and they have to be very price competative to sell.

Just tell a German that you like Heineken and watch the result.

7 January 2010 at 11:23  
Anonymous Anonymous said...

I've got a brainwave.

The Czech Republic should try a controlled economy.

No, wait. They tried that already. It was bullshit.

How about sticking to writing about beer and leaving your mad politics out of it?

10 January 2010 at 12:15  
Blogger Johnny Norfolk said...

If you are still a leftie at 25 you are a leftie for life.

10 January 2010 at 14:52  
Blogger Jeffrey said...

I speak as someone who used to live in Prague. The Czech Republic is becoming richer. They're taking their place as a first rank European nation, as they were before the Second World War and the blight of communism. Rising beer prices and matched by rising wages and living standards. That's something to celebrate.

I tend to agree with the poster above - Roger, give the politics a rest. Your views border on the offensive.

12 January 2010 at 21:19  
Anonymous Michal Kašpárek said...

First, the price of Pilsner Urquell is somewhere around CZK 35 (€1.4) right now - is the translation correct? Isn't that supposed to be a wholesale price?

Also: Czech have changed their attitude to beer. Instead of drinking 5-10 glasses right after the work, as it had been usual until the 1990s, now more and more people search for high quality, unique brands etc. I think that the higher prices are quite appropriate.

2 December 2010 at 13:56  

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