The Czech Republic: Czech Pilsner Urquell beer sold more cheaply in Germany than in the Czech Republic
Pilsner Urquell is being sold significantly more cheaply in German supermarkets compared to the brewery’s native home of the Czech Republic, the Drinks Business reported on January 22.
According to reports via Novinky.cz, while Czech supermarkets are charging up to CZK40 for a half-litre can of Pilsner Urquell, the German retailer Kaufland offers it for €0.99 (CZK24.80 per half-litre). In a drill down into prices, a Czech expats site additionally highlighted how, despite this, Kaufland supermarkets in the Czech Republic still retailed half-litre cans of Pilsner Urquell for CZK37.90.
The price disparity has raised questions, considering the beer is brewed in the Czech Republic, and potentially incurs higher transportation costs when shipped to the German market and yet the price difference implies substantial savings for Czechs willing to cross the border, reportedly saving up to CZK300 on a carton of 24 cans.
Kaufland representatives told reporters that contract terms with suppliers are negotiated locally and are adapted to each of the specific market conditions for individual countries, with a focus on offering favourable prices within certain regions and noted that the pricing strategy adopted by German retailers, was to keep the cost of Pilsner Urquell under the €1 pricepoint.
According to Plzeňský Prazdroj spokesman Zdeněk Kovář, the final beer price is determined by the retailer, irrespective of the country.
Analyst Petr Havel suggested that the premium reputation of Pilsner Urquell in the Czech Republic might also contribute to higher pricing compared to Germany and highlighted how there are other factors to consider. Namely: Higher Czech inflation, consumer willingness to accept higher prices, and the difference in value-added tax (VAT) rates (19% in Germany compared to 21% in the Czech Republic) as potential influences on the beer’s price in differing markets.
Speaking to the drinks business, a spokesperson for Plzeňský Prazdroj, said: “The final price is always determined by the retailer, whether in the Czech Republic or abroad. It is the sales and pricing strategy of the individual retailer. Beer is the national drink not only in the Czech Republic but also in Germany. And for most retailers, beer is a main attraction for shoppers to visit the store and make their purchase. This may be the reason why German supermarkets purposely keep it at a lower level than in neighboring countries. And this is true not only of our products in Germany, but also of the big German brands, whose retail price there is lower than what they cost in the Czech Republic. This may also be influenced by different tax conditions than in the Czech Republic.
The spokesperson additionally told db that it was worth considering that, despite the packaged beer pricing disparity, draught beer is “significantly more expensive in Germany than in the Czech Republic, accounting for only about 15% of the total volume of beer sold on German market”.
At the end of last year, Asahi, which owns the Pilsner Urquell beer brand confirmed that Pilsner Urquell withdrew its sponsorship from the Olympic Games in Paris due to the event allowing Russian and Belarusian athletes to compete.
23 January, 2024
