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Czech-Slovak beer war looms after quota

A beer war between Slovakia and the Czech Republic looms after Slovakia imposed an import quota on Czech beer, limiting its annual imports to 532,000 hectoliters.
Slovak officials and brewers justified it as an "ordinary" measure to protect a domestic industry which has its problems coping with stiff foreign competition. But Czech breweries, who are pushing for exports at a time when domestic beer industry suffers from declining consumption, were both confused and angered.
"The quota should help our brewers fight the ever-growing penetration of Czech breweries the Slovak market," Jozef Hudec of the Slovak Agriculture Ministry said.
"This is a very common measure to protect domestic producers in many countries," added Štefan Karšay, owner of Slovakia's fourth largest brewer, Pivovar Karšay.

A beer war between Slovakia and the Czech Republic looms after Slovakia imposed an import quota on Czech beer, limiting its annual imports to 532,000 hectoliters.

Slovak officials and brewers justified it as an "ordinary" measure to protect a domestic industry which has its problems coping with stiff foreign competition. But Czech breweries, who are pushing for exports at a time when domestic beer industry suffers from declining consumption, were both confused and angered.

"The quota should help our brewers fight the ever-growing penetration of Czech breweries the Slovak market," Jozef Hudec of the Slovak Agriculture Ministry said.

"This is a very common measure to protect domestic producers in many countries," added Štefan Karšay, owner of Slovakia's fourth largest brewer, Pivovar Karšay. "We are disappointed by this decision...as our key trademark in Slovakia, Staropramen, competes by quality and not price," said Diana Dobalová, spokeswoman for Pražské Pivovary a.s.,which is 55-percent owned by Britain's Bass.

Another Czech brewer, Radegast a.s., which is 33 percent owned by Bass, repeated a theme voiced by several Czech breweries that they did not know how much of their exports to Slovakia they would be forced to cut. "Of course we're not pleased by this. We were just told that every [Czech] exporter would receive its own quota for the next period but we still don't know how much it will be," said a Radegast official. Radegast, the second largest Czech brewer by market share exported 136,000 hectoliters of beer to Slovakia in 1996, out of total exports of 186,000 hectoliters.

The limit figure of 532,000 hectoliters is the average level of annual Czech beer imports over the last three years. However, in 1996, the Czechs exported around 643,000 hectoliters of beer to Slovakia after 484,000 in 1995 and 464,000 in 1994.

"In the first five months of this year we imported 174,000 hectoliters of Czech beer which was 17.2 percent more than in the same period of 1996," said Hudec. He added that the quota for each Czech brand would be set quarterly by the Czech Industry Ministry and the Slovak Economy Ministry when regular export-licenses are allocated. The next date was set at June 15.

The official Czech reaction to the move was short but succinct. "The beer quota is an unfortunate measure," Czech Industry Minister Karel Kühnl said in an interview for Czech daily Právo on Tuesday. "In our opinion it will have no effect on Slovak breweries as the hole in the market will simply be filled with beer imports from third countries," he added.

Contemplating the effect of the quota, Slovak lovers of Czech beer said they were horrified at the potential consequence of the move. "I can't imagine offering any Slovak beer to my guests if I run out of my Budweiser quota by, let's say, November," said the owner of a pub serving the Czech brew in Bratislava. Another pub owner seconded, "Maybe we will just have to smuggle it in, just like in ancient times."

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