E-Malt.com News article: The Czech Republic: Microbreweries and craft brands reviving Czech beer industry

Only in the Czech Republic – where the population leads the world in beer consumption at an annual 144 litres per capita – can a brewer become a media star, The Financial Times reported on October 7.

Stanislav Bernard, a flamboyant, 59-year-old former electrical engineer, has become a household name with his eye-catching advertisements. A recent campaign depicted the tousled haired entrepreneur in uniform by a sentry box, replete with the slogan: “Be on your guard against Eurobeer”.

Intended to stress Mr Bernard’s commitment to ‘genuine’ Czech brews made according to traditional methods – as opposed to mass-produced industrial lager – the hoardings send an important marketing message, raise a chuckle from passing motorists and, most importantly, increase sales.

Buying a near-derelict, state-owned brewery in the small town of Humpolec after the Velvet Revolution, his small team sold 107,000 hectolitres in 1992 – four times the previous year’s volume.

“The beer they had been making lacked character,” Mr Bernard says. “We decided to have our own Pilsner-taste, but full-bodied and bitter, from Czech ingredients, and with no short cuts. It remains one of our core beliefs.”

This year, sales from the Bernard Family Brewery are expected to top 250,000 hectolitres.

While this is but 1.5 per cent of the 16 mln hectolitres downed annually by beer-quaffing Czechs, it puts Mr Bernard at the forefront of what aficionados see as a healthy rise in the local ‘craft brewery’ culture – in the face of an otherwise fast consolidating industry over the past 25 years.

“Although not a brewer by profession, Stanislav Bernard is an exceptional personality,” says Tomas Erlich, president of the Friends of Beer – a 1,400-strong association of Czech beer lovers.
He says Mr Bernard not only saved the Humpolec brewery, but his lobbying in parliament in the 1990s reduced the excise tax for smaller breweries, which encouraged the growth of small and micro producers. Indeed, the Czech Republic has seen an explosion of independent producers in recent years, most notably microbreweries located in restaurants.

“In 1992, there was only one microbrewery in the country. Today, we estimate there are 250-260,” says Vladimir Balach, executive director at the Czech Beer and Malt Association.

Mr Erlich accuses the big brewers of closing down multiple sites and giving Czechs “very ordinary” beer.

Such charges smart with Plzensky Prazdroj – the Pilsner Brewery group – which has almost 50 per cent of the domestic market and is owned by SABMiller, the world’s second-largest beer producer.

“We are very sorry to hear such rumours. No brewery on the Czech market has been closed by SABMiller, and there are no such plans for the future,” Katerina Krasova, spokesperson for Plzensky Prazdroj, said.

Moreover, she insists that the group, which owns the famed Pilsner Urquell Brewery, has striven to raise quality at every opportunity, while guaranteeing the use of Czech ingredients and traditional procedures in the production process.

“Over the past 11 years, we have invested more than Kc 18 bln (€652 mln) in developing our breweries, our brands and our employees. Together with Czech farmers, service providers, suppliers of goods, pub and restaurant owners, we significantly contribute to Czech economic growth.”

However, the expansion of microbreweries aside, there is no doubt that the trend towards consolidation within the sector has led to closures elsewhere.

Of the 80 or so breweries in the Czech lands in 1989, about 48 survive today, of which 19 are owned by the big breweries, according to Pavel Prchal, director of the Zemsky Pivovar, a small industrial brewery. “Three have closed in Prague alone in that time,” he says.

Mr Prchal, who is working to open the first new brewery in the Czech capital for 113 years, says the fightback by craft breweries and their popularity among the public has redrawn the market.

“2005-2007 was probably the high point for the big brewery conglomerates, when they had something upwards of 90 per cent market share,” he says.

Today, with the likes of Mr Bernard and the Czech-owned Lobkowicz group showing the way, he puts the share of domestic consumption held by corporate breweries as “down to about 80 per cent”, meaning the independents have doubled their volumes.

The big brewery groups have responded, both by introducing their own unfiltered brands and by boosting exports – at 3.5 mln hectolitres last year, a 17 per cent rise on 2010.

It is all welcome news for Mr Erlich and friends. True, not all the new microbreweries can be recommended unconditionally, he says. “Some don’t have the heartfelt passion or knowledge; it’s just a way to earn money. But, fortunately, most offer quality, and that’s good for diversity and for craft beer”.


08 October, 2014