Alcohol sales in Czech Republic down 38 percent due to closures

Illustrative photo: Clarissa Gonzalez, Unsplash / CC0

The repeated closure of hotels and restaurants due to anti-coronavirus measures, along with the absence of foreign tourists, continue to negatively impact alcohol sales on the Czech market. Sales of spirits in from January through October fell by 38 percent in annual terms, according to recent data.

E15 reports that total revenues from the sale of spirits in gastronomy decreased by 2.2 billion crowns. Despite a significant decline in sales, however, the Czech state collected "only" 240 million crowns less in excise duty on spirits in January to October compared to the same period in 2019. This is mainly due to an increase in the excise tax on spirits by 13.2 percent from 1 January 2020.

"The closure of the HORECA sector (hotels, restaurants, catering and cafés) segment in the run-up to Christmas is a big blow for us. In gastronomy usually approximately 50 percent of the total consumption of spirits is sold,” Vladimír Darebník, Executive Director of the Union of Producers and Importers of Spirits in the Czech Republic said.

“These losses are not able to compensate even slightly higher sales in retail… While beer and wine consumers have switched heavily to buying these beverages at retail, the increase in sales of spirits in this segment is much smaller."

According to the Nielsen agency, sales of spirits in gastronomy fell by 2.2 billion crowns in the period from January to September, while sales in stores increased by only 200 million crowns. Beer sales increased by 1.1 billion over the same period.

In a normal year, spirits generate about 8 billion crowns for the state coffers in VAT every year. The industry itself provides employment to 2,500 people directly and 20,000 indirectly. At least a quarter of all alcoholic beverages consumed in the Czech Republic are drunk by tourists or foreign workers based in the country, according to the industry group.