Beer Price in Prague Could Exceed 70 CZK Per Pint

The average price of a half-litre of 12-degree beer in restaurants and pubs in Prague in July was CZK 64, compared to CZK 59 a year earlier, representing a rise of 9 percent, the national Association of Small and Medium Enterprises said.

Across the nation, the mean beer price reached CZK 54 in July, a contrast to CZK 49.80 during the same period the previous year, indicating an increase of over eight percent.

As part of 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 usher in an approximate national average of CZK 59 per pint post-VAT increase on draught beer.

Czech breweries wield significant influence over beer pricing, often making adjustments during the autumn. In the past year, Plzeňský Prazdroj, Staropramen, and Budějovický Budvar all raised draft beer prices, primarily attributing these changes to escalating energy costs.

The director of the Association of Small and Medium Enterprises in Czechia Luboš Kastner, also raised concerns about the government’s decision not to impose excise duty on still wines.

Due to these beer-related VAT shifts, which significantly 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.

In 2022, beer sales in restaurants were at their lowest level in the past 10 years. Just 31 percent of all beer in Czechia last year was consumed in pubs and restaurants – in 2009, this proportion was about 50 percent.

In its austerity package, the government also plans to increase the consumption tax on spirits by 10 percent next year, and thereafter by 5 percent annually until 2028.

This, too, will hurt pubs and restaurants according to the Association of Breweries and Malthouses. There is also a risk, according to the Czech Union of Distillers, that the rises in VAT rates will cause increased activity on the black market.