Czech beer market development

Vladimir Balach, General Secretary of CBMA

Czech Beer and Malt Association

CBMA represents interests of breweries, malt houses
and other suppliers and partners in beer sector
One of the oldest beer associations in Europe
Former Society for beer industry in Czech Kingdom
was established in 1873
CMBA Ethical code and self-regulation process

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Breweries in the Czech market

Czech beer market is diversified represented by
breweries of all sizes from large international
brewers to small local breweries
6 large brewing companies (Pilsner Urquell,
Staropramen Brewery, Heineken, Budweiser Budvar,
Lobkowitz Brewery, Moravian-Silesian Brewery)
27 individual small to mid-size breweries
Boom of mini and restaurant breweries in 2012
there were registered approximately 160
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Current situation on beer domestic market

The brewing industry, affected by the economic crisis, has faced an
unprecedented decline in beer output following the excise tax increase
After two years of significant decline in total production this trend stopped
in 2011
In 2012 total beer production increased slightly by 2,75%
Production for the domestic market increased only by 1,4 %, fueled mostly
by beer mixes growth
Malt production copies trend of beer 2012 526 kt
Hops production est. 2013 4 700 t

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Structure of breweries in the Czech market

250

200

Yearly production
1.000 hl
Production >
1.000 hl and
50.000 hl
Production >
50.000 hl and
200.000 hl
Production >
200.000hl

150

100

Total number of
breweries

50

0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
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Structure of breweries in the Czech market

Breweries in the Czech Republic

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

89

90

91

100

126

128

133

151

191

213

Yearly production 1.000 hl

(microbreweries)

35

36

36

41

66

57

51

65

90

20

Yearly production > 1.000 hl and

50.000 hl

18

18

15

20

22

31

49

48

70

158

Yearly production > 50.000 hl and

200.000 hl

16

16

18

19

19

20

12

11

10

10

10

78

79

79

90

116

115

116

135

177

197

Total number of breweries

(including microbreweries)
Number of brewing companies

Yearly production > 200.000hl

Total number of brewing
companies

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Total beer production in the Czech Republic

25.000

176
19.198

20.000
129

15.000

19.897

19.806
18.637

17.924

17.475
16.276

18.591
16 180*

16 705*

104
11.418

10.000

19.787

9.245

79

71
57

48

47

47

47

47

47

47

5.000
0

200
180
160
140
120
100
80
60
40
20
0

1950 1960 1970 1980 1990 2000 2006 2007 2008 2009 2010 2011 2012
Beer production in thousands hl
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Number of active breweries

CZECH BEER AND MALT ASSOCIATION
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Beer production for domestic market

6,0%
3,8%

4,0%
2,0%

1,6%

2,6%

2,0%
1,1%

1,7%

1,4%
0,1%

0,0%
-0,3%
-2,0%

-0,5%

-4,0%
-6,0%

-5,9%

-8,0%
-10,0%

-8,6%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

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Trends Czech malting industry (in kt)

600
521

541

528

522

518

526

499

500

475
428

400
351
314

300

281

279

263
244

233

244

258
241

208

200

166
148

141
114

100

106

83

0
1950 1960 1970 1980 1990 2000 2006 2007 2008 2009 2010 2011 2012

Production
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Export
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Surface hop-field and hop production in the Czech republic

15 000
14 000
13 000

Hop production (t)

Surface hop-field (ha)

12 000
11 000
10 000
9 000
8 000
7 000
6 000
5 000
4 000
3 000
2 000
1 000
0

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Market development, change in consumer

demand
The long tradition of drinking almost only lagers in the Czech
Republic has changed. It was built on the traditions of the famous
Czech brewing, dominated by the pilsner-type lager.
In the last few years, consumer demand has evolved. One of the
trends is a shift from the HORECA segment towards in-homeconsumption.
The group of older consumers still prefers Czech lager as the
dominant type of beer. The pub is the preferred style of socializing
for them.
Younger consumers prefer a variety of choices: variety in beverage
choice, variety in packaging for different occasions and
differentiated consumer experience.
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Beer consumption per capita (in liters)

165
160,9

160

159

158,8
156

155

158,1

157,9

158,8

156,5
154

150
145

144

144

145

144

140
135

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Consumption of beer across distribution

channels
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

49%

57%

51%

43%

2009
On-trade

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2012
Off-trade

CZECH BEER AND MALT ASSOCIATION

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Consumption by type of beer

2009
5,10%

Tap beer

32,60%

2012

Lagers

7,06%

Other

62,30%
Tap beer
Lagers

38,05%

Other

54,89%

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Consumption of Czech beer among tourists

While Czechs drink at average one small beer a day (0,3l), tourists drink almost
two large beers a day (0,9l)
Tourists consumption of beer (L/person/day)

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Tourists consume in the Czech Republic in total

40 million large beers (20 mil. liters)

CZECH BEER AND MALT ASSOCIATION

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CZK 25bn
Tax payments

Overall impact of Czech brewing sector

SUPPLIERS

BREWERIES

HORECA +
RETAIL

Farmers
Utility
Construction industry
Chemical industry
Logistics services
Etc.

Microbreweries
Minibreweries
Large breweries
Malt producers

Pubs
Restaurants
Cafes
Retail
Wholesale
Chains

55,000 employees
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Direct impact of Czech brewing sector

7,600 employees directly employed in the brewing
sector *
90 95% of raw materials come from Czech
Republic
Support for Czech farmers barley, hops
Czech beer brewed using Czech ingredients
Beer for the czech market produced exclusively
within Czech Republic
*SOURCE 12: The Contribution made by Beer to the European Economy (Full Report Edition 2009) prepared by Ernst & Young (pp. 55, 57 and 59)

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Indirect impact of Czech brewing sector

12,500 indirect employees* at SUPPLIERS
34,600 employees in HORECA and RETAIL* sectors
CZK14bln payments go to suppliers from Czech
brewing sector (91% of the amount stays in Czech
republic*)
The largest portion of revenue from sales in HORECA
(25%) is from beer (hotels, restaurants, cafs)
*SOURCE 12: The Contribution made by Beer to the European Economy (Full Report Edition 2009) prepared by Ernst & Young (p.55)

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Contribution of Czech brewing sector

CZK 10,8bn - to the State Budget

Excise tax, VAT, legal entities tax, employees
income tax, other*
CZK 6,8bn - indirect tax-related revenues
Through suppliers sector*

*SOURCE 12: The Contribution made by Beer to the European Economy (Full Report Edition 2009) prepared by Ernst & Young (pp. 55, 57 and 59)

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Czech Beer and Malt Association (CBMA)

INITIATIVE

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20

Protected geographical indication Czech beer

PGI Czech beer registered in 2008
Used by 16 breweries for 77 beer trademarks
Strict control of compliance with many requirements, e.g.
80 % of malt pouring per brewing is made of spring barley of
recommended sorts
30 % of hops per brewing has to be hops from atec and its
recommended clones etc.

Main benefits:
Quality guarantee for consumers
Protection against bad competition
Guarantee of stable demand for raw material suppliers
Support of export and tourism
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New research on composition of Czech beer

from VPS
Screening of selected health beneficial substances in Czech and
foreign beers
Compared representation of controlled substances in Czech and
foreign lagers
Czech beer contains elevated concentrations of:
B vitamins
oligosaccharides and higher dextrins
polyphenolic substances
bitter substances

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Czech Beer &Malt Association (CBMA) Ethical

Code
CBMA Ethical Code

More strict than national self-regulation code

Self-regulation process

Complaint is given by any brewery

RBI give the recommendation to the Presidium of
CBMA
The decision should be done until 10 days
If doubts the last arbiter is National self-regulatory
body

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As long as I drive, I drink non-alcoholic beer !

Project scope

Czech Beer and Malt Association (CBMA)

signed Memorandum about cooperation
with Czech Police
Objective of cooperation is related to the
traffic safety improvement, especially in the
area of drinking and driving
CBMA members together with police award
responsible drivers
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Czech beer market in a nutshell and treasure

Beer is an important part of Czech Culture
We take pride in it both at home and abroad
More than 2/3 of all beers produced worldwide are
of Czech, the Pils type
Increased choices for consumers, but with constantly
high quality and taste richness
Development of beer domestic market is limited by
the high consumption (expected gentle decline)
Czech beer is one of the pillars of the Czech Republic
brand
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Czech Republic brand pillars

Czech beer
Ice-hockey
Skoda

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Thank you!
www.ceske-pivo.cz