As we welcome the New Year, beer lovers in the Czech Republic will likely have to grapple with prices nearing fifty crowns for a half-liter beer. Starting from the first of January, tapped beer will move from its current ten percent reduced value-added tax rate to a total twenty-one percent rate. This change in VAT is part of the government’s austerity package.
A price increase of about five crowns can be expected in most dining establishments. “The market, as always, will determine the prices, and the situation will vary according to location and market demand and supply. We are one of the most fragmented sectors with perfect competition traits. If I were to guess purely for myself, as a commentator on the industry, prices could fall according to the government-approved increase in VAT, that is, a change of eleven percentage points,” estimated Luboš Kastner, the guarantor of the gastronomy sector in the Association of Small and Medium Enterprises and Tradesmen.
For instance, visitors to the famous Ostrava restaurant U Rady will have to reckon with a ten percent increase in beer prices. “We currently sell Pilsner lager for 57 crowns, so we have to raise the price by a few. Mainly due to the increase in value-added tax, which we must pay to the tax office,” said the restaurant operator Dagmar Bavlšíková.
Similarly, businesses in other parts of the Czech Republic are in the same boat. For a tapped Pilsen lager, guests will have to pay extra next year, perhaps in the renowned restaurant of Hotel Zvon on the square of Přemysl Otakar II in České Budějovice. “Currently, our drafted beer from the tank costs 68 crowns, and from the New Year, we plan to increase the price by about five crowns due to VAT,” said restaurant manager Zdeněk Novotný. He added that they had already raised the price of beer in October from 65 to 68 crowns.
Even the countryside is no longer cheap. However, there are exceptions where restaurant operators do not currently expect a price increase. For example, one of the largest pubs in the Czech Republic, Na Spilce restaurant in the Pilsner Urquell complex, will not yet raise prices. “We do not plan to change the price of drafted beers in January,” the local manager Petr Starý told Novinky.
With these changes coming into effect, it seems that the New Year will bring both joy and disappointment for beer enthusiasts in the Czech Republic.