The Czech state-owned brewery, Budějovický Budvar, will raise prices for all brands of its beer, from November. The increase will average 10%.
It comes after the company said its prices will rise because of “vicious” cost pressures: electricity, gas, hops, malt and packaging materials.
Budějovický Budvar’s chief executive Petr Dvorak said: “These kinds of price increases and inflation, I think we have not seen in a generation.” He added that putting up prices could lead to “softer beer consumption” as drinkers reined in their spending due to soaring living costs.
“Electricity has risen in price by 300%, which means tens of millions of crowns per year. The same applies to the prices of cans, bottles, cardboard boxes, packaging materials and gas. For example, we expect a larger increase in the price of malt, which is our most important expense.
Reports from hop factories show a catastrophic harvest. “Although we have long-term three-year contracts, I expect that they will not be fulfilled because hops simply do not exist. Raw materials and packaging have already increased in price by more than 10%,” he added.
Budějovický Budvar increased its net profit by some 10% for the second straight year as it saw record output and exports despite the coronavirus pandemic.
Its net profit reached 337 million Czech crowns in 2021, up from 305 million the previous year. Its net profit was up nearly 10% in 2020.
Its exports were up a record 11% in 2021, reaching 1.3 million hectoliters. Budvar sells its beer in more than 70 countries, with Germany among its major markets.
Budvar also registered record output for the second straight pandemic year, rising 4.6% to 1.8 million hectoliters.
The pandemic affected the beer markets, with demand for beer in tanks and barrels declining as bars and restaurants closed for some time but demand for bottled beer rising.