Czech Republic’s largest brewer raises draft-beer prices for first time in years

Czech brewer Plzeňský Prazdroj will raise the price of beer by an average of 3 percent starting in October. Prazdroj, the maker of Pilsner Urquell and other brands, is the largest brewing group in the Czech Republic and a trendsetter for the rest of the market. Its price increases in recent years have been copied by most other larger Czech breweries.

Most Plzeňský Prazdroj products will be affected, with an average of an average rise of CZK 0.46 per half liter. For the first time in three years, price changes will also affect draft beers. The information about the increases came from pubs an retail chains. Brewery spokesman Zdeněk Kovář confirmed the information for the Czech News Agency (ČTK).

The previous price rise was last October, when Pilsner Urquell increased the price of some bottled and canned beers, mainly lagers and premium beers, by an average of 3.6 percent. The price of beer in kegs and tanks remained unchanged.

Aside from its flagship Pilsner Urquell, the brewery also produces the Radegast, Gambrinus, Velkopopovický Kozel, and non-alcoholic Birell brands. The brewer struggled heavily with restrictions on pub and restaurant operations during the year-long coronavirus pandemic, due to the forced closure of pubs and restaurants except for delivery.

An average of four out of 10 beers from its portfolio are normally tapped in restaurants or pubs, and the rest are sold in stores.

The increase in the price for draft beers is the first since 2018. Even though inflation cumulatively exceeded 8 percent over that time, Plzeňský Prazdroj kept prices at the same level to help the pub and restaurant sector cope with all the changes that affected it, Kovář said.

“These were the consequences of the introduction of regulations such as the EET, the smoking ban, and the effects of the pandemic,” he said.

He added that the brewer has invested more than CZK 500 million over 12 months to support restaurants, with free replacement of expired beer, deferred payments, investment in front gardens and equipment, and the distribution of takeaway bags for draft beer.

The brewer has also continued to expand its infrastructure.

In June, Plzeňský Prazdroj reported that net profit for 2020 reached CZK 3.8 billion, a drop of one-fifth in 2020 compared to the previous year. Prazdroj in 2020 sold 6.69 million hectoliters of beer on the local market, a drop of 8 percent compared to 2019.

“Neither higher interest in bottled and canned beer, nor maintaining our sales figures abroad on the same level as in 2019, helped compensate the losses caused by restrictions on the operation of pubs and restaurants. In the pre-Covid times, draft beer constituted 40 percent of our sales and this segment dropped by almost a third last year,” Plzeňský Prazdroj general manager Dragoş Constantinescu, said at the time.

Plzeňský Prazdroj has been owned by Japanese company Asahi Group Holdings since 2017.

The Czech Republic has long had the highest per-capita consumption of beer in the world. It also has some of the lowest prices, according to international comparisons.