The beer industry in the Czech Republic is facing tough times, with the share of beer sales in the gastronomy sector falling from one-fifth in 2019 to 15% this year. In pubs, the percentage of beer sales has dropped from 55% to 44%, mainly due to rising costs and changes in customer behavior. The share of wine sales remains at 3%. These figures come from an analysis by Dotykačka, a company with data from around 8,000 businesses in the country. Company representatives presented the results at Tuesday’s Gastro Talks event in Prague.
According to Vladimír Sirotek from Dotykačka, the share of the revenue from food is increasing in the gastronomy sector. “Soups have increased the most, by around 22% over the past 12 months,” he added. Hamburgers have gone up by 25%. On the other hand, according to Sirotek, the price of fried cheese, which has risen by three percent year-on-year, has increased significantly due to rising prices in previous years.
Rise in Popularity of Sparkling Wines
Data from the company shows that the popularity of sparkling wines is on the rise. According to Sirotek, people are drinking more sparkling wine than still wine. Its consumption is increasing mainly in the regions, whereas it used to be primarily in Prague.
“The price of sparkling wine is falling due to the emergence of cheaper substitutes,” said Sirotek. According to him, sales of sparkling wines rose by 19% year-on-year in the first quarter.
Small Pubs in Rural Areas Disappearing
Luboš Kastner from the Association of Small and Medium-Sized Enterprises said that according to Dotykačka’s data for May, gastronomy revenues were lower for the first time this year. According to the so-called gastro index, where the company monitors the 50 best-selling items, the price level rose by nine percent compared to May last year.
“In the end, this means a real % decline in Czech gastronomy performance by 12%. This is a very negative sign, which, together with the planned increase in VAT from 2024, will most likely lead to the transformation of Czech gastronomy within 12 months,” he said.
He says a wave of bankruptcies can be expected, especially in rural areas. He said he sees no logic in the government expecting higher tax revenues, as changes in VAT will lead to higher beer prices and a decrease in demand. He also expects the share of beer sales in businesses to decline more rapidly. According to him, the Association of Small and Medium-Sized Enterprises is advocating at least a one-year postponement of the VAT changes.
The Impact of the Pandemic
The COVID-19 pandemic has had a significant impact on the Czech gastronomy sector. The closure of bars and restaurants during the pandemic has led to a sharp drop in sales and the number of visitors. The industry has been hit hard, with many businesses struggling to stay afloat.
According to Kastner, the pandemic has accelerated the decline of small pubs in rural areas. “The situation was already critical before the pandemic, but the pandemic has accelerated the decline,” he said.
The Future of Czech Gastronomy
The future of Czech gastronomy is uncertain. The decline in beer sales and the rise in food prices put pressure on businesses. The increase in VAT from 2024 is expected to exacerbate the situation further. Small pubs in rural areas are disappearing at an alarming rate, and a wave of bankruptcies may be on the horizon. The only hope is that the government will take action to support the sector and help businesses survive these difficult times.