In July, Prague’s restaurants were selling a pint of beer with a twelve-degree measurement at an average price of CZK 64.30. This marked an increase from last year’s price of CZK 58.80, representing a year-on-year rise of over nine percent. Given the recent VAT hike on draught beer, the cost might surpass CZK 70 in the coming year.
Luboš Kastner, a representative from the Association of Small and Medium-Sized Enterprises, mentioned on Wednesday that projections for the beer’s price were drawn from data provided by Dotykačka, a company offering cash register systems to around 8,000 establishments in the Czech Republic.
Across the nation, the mean beer price reached CZK 54 in July, in contrast to CZK 49.80 during the same period the previous year. This indicated an increase of over eight percent.
Within its economic recovery strategy, the government intends to shift draught beer from the 10 percent VAT rate to the standard 21 percent rate. Consequently, if the average prices of July persist, the new year could bring an approximate national average of CZK 59 per pint post-VAT increase on draught beer.
Disagreement on Beer Prices: Kastner proposed that in Prague, the price could exceed 70 crowns. Nonetheless, Agriculture Minister Marek Výborný (KDU-ČSL) remarked that there was no sign of the pint of draft beer exceeding CZK 70. He cited the drop in food prices, concurrent with inflation. Despite this, Kastner contended that beer prices had been consistently rising month after month.
Furthermore, breweries hold a significant sway on beer pricing, typically making adjustments during the autumn. In the past year, Plzeňský Prazdroj, Staropramen, and Budějovický Budvar all raised draft beer prices, largely attributing these adjustments to escalating energy costs.
Hop Harvest and Beer Prices: Minister Výborný connected beer prices with the hop harvest. This year’s harvest is anticipated to surpass the previous year’s, reaching 6,000 tonnes—a gain of more than 1,500 tonnes. Yet, the previous year’s yield was notably better, at 8306 tonnes. Nevertheless, Výborný emphasized that the average harvest should not negatively impact beer prices.
Economist Tomas Maier, from the Faculty of Operational Economics at the Czech University of Agriculture, previously indicated that agricultural elements such as barley and hops only contribute minimally to the final beer price. For major breweries, these components constitute merely around one percent of the product’s ultimate cost.
VAT Changes and Still Wines: Kastner, who has criticized VAT changes on beer in the past, also raised concerns about the government’s decision not to impose excise duty on still wines. Due to these beer-related VAT shifts, which greatly affect numerous businesses’ revenue, he anticipated potential closures, particularly among small businesses in rural areas. The Association of Small and Medium-Sized Enterprises advocated for a one-year postponement of the VAT modifications.
Výborný mentioned that representatives from the coalition and various ministries would discuss potential taxation options for still wine later that evening. He anticipated proposals that wouldn’t overly burden wine producers. Notably, these changes wouldn’t be integrated into the recovery package, as stated by the minister during a visit to hop growers in Obora near Louny. The People’s Party had long advocated for maintaining zero excise duty on still wines, while other parties held differing stances during the consolidation package negotiations.
Source: novinky.cz
