Czech Beer Industry Struggles Amid COVID-Restrictions

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Czech Beer Industry Struggles Amid COVID-Restrictions

Photographer: Martin Divíšek

The Czech Republic’s world famous beer industry has for centuries been one of the country’s major cultural attractions, an industry that flourished through world wars, occupation by an invading army as well as decades of communism, all while barely losing a drop in sales.

But all that has changed with the Covid-19 pandemic, which has severely dented Czech beer profits as restrictions imposed to curb the spread of the deadly disease, including the closure of bars and restaurants, have taken a heavy toll, brewers say.

Between March and June, when authorities imposed one of the world’s strictest lockdowns, Czechia’s beer industry reported losses of almost five billion Czech koruna ($215 million), the Czech Beer and Malt Association said last month.

The damage is particularly acute in the capital, Prague, which is one of Europe’s most popular city destinations.

"Clearly Prague’s hospitality scene has been about the most impacted," the managing director of the Budweiser Budvar, Petr Dvořák, tells EPA-EFE.

"Whereas the rest of the Czech Republic enjoyed a relatively good summer, especially in the traditional tourist regions, Prague significantly slowed down. And the fall predictions don’t offer much optimism either."

U Fleku, a brewery in the center of Prague that has been operating since 1499 has suffered greatly during the pandemic.

With the normally bustling Czech capital devoid of its usual foreign tourists, the brewery’s main clientele, sales at U Fleku have been plummeting.

The brewery now only produces 15 percent of its regular volume, forcing the owner to dismiss half of his staff and lower his prices by 15 percent.

To compensate for the absence of tourists and try to make a splash during the annual Czech Beer Days festival, the brewery has for the first time in 177 years started offering a pale lager to appeal to local tastes instead of its 'classic' dark brew.

The industry is in dire need of a shot in the arm. During the lockdown, sales at Czech breweries dropped by CZK 1.1 billion, while suppliers recorded losses of CZK 165 million, according to the Czech Centre for Economic and Market Analyses (CETA).

With bars, restaurants and nightclubs closed and only permitted to do takeaway orders through the window during lockdown, beerlovers both in Czechia and further afield helped bridged the gap between brewer and imbiber, causing sales to supermarkets and online to soar.

"We can see a massive growth in our (online) sales," Dvořák says, adding that "supermarkets and packaged beer sales compensated for the loss in draft beer sales," at least in the case of the world famous Budweiser Budvar.

The biggest adjustment large-scale brewers were faced with was in the 'structure of the sales' in terms of packaging; with bars and restaurants shut, barrels and kegs have been replaced with bottles and cans.

Although medical experts say that the pandemic is still in its early days, brewers with greater means of production appear to be weathering Covid-19 thanks to increased orders from individual beer lovers.

"Overall our sales were almost 2% above the last year in total at the end of August," Dvořák admits.

For small-scale microbrewers in the country, of which there were around 500 before Covid-19, the pandemic has been far more challenging.

Anna van der Weerden, founder of family-run brewery and eatery Svihov, started the venture with her Dutch husband, Martijn, this year, and has seen the launch hampered by a series of complications.

"Everybody else was worried that we were starting a new brewery in corona times," van der Weerden tells EPA-EFE in the courtyard of an old farmhouse they are converting into a brewery, beer club, farm shop and apartments.

The pandemic presented a host of obstacles, especially with the lack of reliable labour that was mostly supplied by migrant workers, many of whom returned home as the lockdowns were ordered and borders were closed. The courtyard has not been finished as there are still very few construction workers available.

Obtaining permits from customs authorities was also slower than normal because of the restrictions, van der Weerden says.

"But we were not scared - we wanted to make it work," she says, noting that the current bizarre and challenging circumstances have forced brewers and distributors to become more resourceful.

"You can restructure your business because of corona, but you need to be creative."

With the country in the midst of a second wave of infections and new restrictions expected, van der Weerden and her husband have improvised, converting a van into a mobile bar with beer taps on wheels so that they can still reach their customers.

"We changed business plans - we focused on technologies and the tap on wheels," van der Weerden says. "We took every opportunity to attend markets, festivals and local events."

As well as adapting to the current corona climate, Svihov has carved out its own niche in the highly competitive Czech beer landscape, being the only brewery producing Dutch and Belgian-style beers in the country.

Martijn carefully recreated a recipe for an old, colonial-era Dutch beer, adjusting it to cater to Czech tastes and the condition of the local water, a crucial facet to the flavor of any quality beer.

And not wanting his wife to miss out, Martijn also crafted a grapefruit version which, to his surprise, has quickly become his customers’ favorite.

The couple sees the support they have felt from their neighbors and local beer enthusiasts as vindication of their risky venture, for which both gave up their own lucrative careers: Anna, who took night classes to become a chef to be able to offer quality food to their customers, has stopped practicing as an attorney, while Martijn used to be a software engineer.

"From the very first moment we had orders, offers and a lot of appreciation. That gave us hope and energy to go forward," Anna says.

The sense of community among those in the country's beer scene is one of the more uplifting silver linings of the surreal situation imposed by coronavirus.

An online funding campaign, zachranpivo.cz, was launched to collect donations to support the country’s microbrewers through the crisis, which Anna thinks has helped strengthen the subculture and bring members of the community closer together.

"I am most surprised how tolerant guests are of the current state of the brewery," she says, standing in the as yet unfinished courtyard. "And still, guests are coming and giving great feedback and support."

Small and large breweries staying afloat not only keeps brewers and bar and restaurant staff employed, it also provides a lifeline to those who grow and process hops.

While overall output in the industry has fallen during the pandemic and the need for hops is lower, Vladimir Seretka, the sales director of Bohemia Hop, which purchases the plants from growers and sells the processed hops onto domestic and foreign customers, tells EPA-EFE that they are "pleasantly surprised at how the breweries have managed this difficult situation."

Seretka says Covid-19 has been much tougher on the growers, who have seen the price of labor increase, while harvest costs have also shot up because of complications surrounding quarantines and tests of workers.

The lack of seasonal migrant workers has also meant that a new, inexperienced workforce was needed to pick the crops. "The quality of the output lagged somewhat," Seretka admits.

Despite the difficulties, the demand for beer in the Czech Republic has not diminished, and brewers, both micro and macro, are confident the culture and industry will survive coronavirus.

"It is a strong culture, as we could see during the summer months," Budvar’s Dvořák says, pointing out that beer "in general is less impacted by economic cycles."

"I strongly believe people will come back to pubs as soon as we will have found a way to deal with Covid-19."

It is a confidence that Anna van der Weerden shares.

"Drinking beer is first and foremost a social event and you cannot erase all social interactions," she says. "The consequences (of that) would be worse than a few very sick people."