Czech Republic: Budweiser Budvar suffers from loss of Russian export market

Budweiser Budvar (Budějovický Budvar) brewery has sold last year 1.5 percent less beer than the year before. The brewery which is owned by the Czech State reported a total beer output of 1.79 million hectoliters for 2022.

The lower sales figure can primarily be explained with the loss of the Russian export business, which was discontinued after Putin's attack on Ukraine, according to Managing Director Petr Dvořák. “Nobody can be satisfied. But I understand the reasons that led to a drop of one and a half percent. The loss in Russia accounts for the lion's share of this,” explained Dvořák in an interview with ČTK press agency.

In the years before the withdrawal, Russia along with Germany, Poland, Slovakia and Great Britain was one of the five most important export markets for Budweiser Budvar and accounted for around CZK 250 million (about USD 11.4m).

Last year’s business but even more future business will be negatively impacted by increasing costs for energy and raw materials. “I can report in advance that we will have a bigger problem with our profit. On the cost side, we have seen an increase in energy expenditure of 100 million crowns [USD 4.6m]. Packaging materials also became more expensive last year, and this year there will be higher prices for malt, which will increase by several tens of percent. Certainly we will not have losses, but will make profits. But it will be much lower,” said Dvořák

For this year, Budweiser Budvar is planning total sales of over CZK 3 billion (USD 137m).

According to Dvořák, the successful market launch of the non-alcoholic beer BirGo helped to mitigate the negative effects of the export business last year and will positively contribute to this year’s results.

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