Czech breweries have lost millions of crowns due to pandemic closures, and they're asking for compensation

The Czech Association of Breweries and Malthouses is seeking government assistance for lost revenue

Samantha Tatro

Written by Samantha Tatro Published on 03.11.2020 14:13:00 (updated on 03.11.2020) Reading time: 2 minutes

Czech breweries across the country are losing millions of crowns each month due to pandemic closures, and they're asking the government for assistance as closures continue, according to a published report in Seznam Zpravy.

Restaurants, pubs and bars were forced to close for a second time in October, and even if these establishments are allowed to re-open by December as planned, most breweries will have been closed for a third of 2020, according to the Czech Association of Breweries and Malthouses.

"The Czech Association of Breweries and Malthouses understands the need to take strict measures to prevent the spread of the epidemic, but the ongoing closure of restaurants is a major blow not only to the gastronomic operations themselves, but also to breweries that lose hundreds of millions of crowns a month," Martina Ferencová, executive director of the organization, told Seznam Zpravy.

Many of the current compensation programs for struggling businesses do not apply to Czech breweries.

For example, the Ministry of Finance's Agricovid program, which will redistribute up to three billion crowns to food producers and farmers affected by coronavirus, would not cover breweries. The program has yet to be approved by the European Commission.

Under the Agricovid program, businesses whose turnover dropped by 25% between the beginning of March and the end of November when compared to the same time period of the previous year will be entitled to compensation. According to the ministry, each company can get a maximum of 200,000 CZK and up to 20,000 CZK per employee. For food producers, the maximum subsidy will be EUR 800,000, or approximately 21.6 million CZK.

Many breweries and gastropubs have seen a shift in their daily sales due to the pandemic. Breweries from the Gourmet Invest Group, for example, told Seznam Zpravy that they now see 10 to 15 percent of their average daily sales through their windows and through deliveries. The time of sales has shifted, too.

"Most of the consumption in our operations took place in the afternoon and evening, now about 60 percent of orders during lunch are until 14:00 and the remaining 40 percent between 16:00 and 18:00," Miroslav Harašta, director of the Znojmo Brewery and Jarošov Brewery, told Seznam Zpravy. 

Harašta added that many of their customers are now looking for a bigger variety of beer when they order bottles to go. It's a shift from when customers would come into the brewery; in-person sales tend to favor bottom-fermented lagers.

The Czech Association of Breweries and Malthouses, working with the Association of Small and Medium-sized Enterprises, had previously asked the Czech government to help restaurants due to the pandemic.

The National Gastronomy Program has five proposed long-term measures and four short-term measures. However, the organizations also hope the government will extended the current Antivirus program, legalize tips and reduce VAT to five percent for catering services.

Ferencová hopes to discuss a program where breweries will not have to pay excise duty on liquidated beer next year as well with the Ministry of Finance.

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