Business News

In Business News: Heineken - Krusovice merger okayed by the anti-monopoly office; Czech foreign trade heading for a record surplus; an unexpected fall in inflation; a downturn in the consumption of electricity; Czechs busted claiming sick-leave; road tolls might apply to vans; and Czechs' tipping habits explored.

Anti-monopoly office gives Heineken the go-ahead to buy out Krusovice

On Tuesday, the sale of the Central-Bohemian Krusovice brewery to Dutch group Heineken was approved by the Czech anti-monopoly office. The merger is expected to give Heineken an 8% share of the Czech market, making it the third biggest beer-producer in the country. Heineken already owns the Starobrno brewery in Moravia, and with this new addition to its portfolio is expected to produce more than 1.85 million hectoliters of beer a year, here in the Czech Republic. The largest brewery in the Czech Republic remains, however, Plzensky Prazdroj, with a share of almost 45% of the domestic market.

In related news, Czech beer output for the first half of this year reached a record 9.9 million hectolitres in total. Sales of beer increased both at home and abroad. A spokesperson for the Czech Beer and Malt Association put the rise in sales down to the scorching summer that Europe is having.

Czech foreign trade surplus heading for a record high this year

Photo: European Commission

Czech foreign trade is expected to mark a record surplus this year, according to the CTK news agency. The surplus for the period of the first six months of 2007 reached CZK 53.8 billion, up by more than CZK 20 billion year-on-year. The surplus for the whole of 2007 could amount to between CZK 60 and 80 billion. Czech exports have been benefiting from the fast growth of the European economy as well as the crown weakening against the euro. In the second half of this year, however, foreign trade statistics are expected to be lower as the structure of Czech export does not guarantee steady growth.

Unexpected fall in inflation to 2.3%

Finance Minister Bohuslav Sobotka

In contrast to predictions, inflation fell from 2.5% in June to 2.3% in July, the Czech Statistical Office revealed on Wednesday. The slowdown was attributed to a virtual freeze in the price of package-holidays, which normally rise in price over the summer months. Some analysts now predict that the Czech National Bank will react to the figures by putting off the next interest rate increase until September. But this view is by no means unanimous - with inflation expected to rise to 3.5% by the end of the year, many expect the National Bank to raise rates in August in anticipation.

Less electricity consumed in H1 2007

Consumption of electricity in the Czech Republic in the first six months of 2007 fell 3.1 % compared to the same period last year, the Czech Energy Regulatory Office has announced. The total of 29.91 tetrawatthours was consumed in the country between January and July this year. Lower electricity consumption is attributed to this year's unusually warm winter.

Over 7,500 Czechs busted claiming sick leave

Sick leave is being abused in the Czech Republic, reported Hospodarske Noviny on Friday. The paper was going on statistics published by Czech Social Security for the first half of this year, in which over 7,500 Czechs were found to be claiming sick leave when they were not ill. In the first 6 months of this year, there was an upturn in Czechs calling in sick, with doctors issuing 1.6 million sick notes. Companies paying the lowest wages found that they had the sickest employees. Sick leave is currently subsidised by the Czech government, who are planning a series of reforms. They propose to cut all benefits for the first 3 days of illness, and transfer more responsibility to the employer.

Road toll might apply to vans

Beginning in January 2008, tolls on Czech roads might apply for vans as well, according to the daily Mlada Fronta Dnes. The Czech Ministry of Transport is considering pushing for a change in the Road Transport Act which would allow for the introduction of the toll for vans lighter than 12 tons. Many freight forwarders started transporting goods in small vans in order to avoid road toll fees that currently only apply to larger vehicles.

Most Czechs give small tips, survey suggests

76 % of Czechs tip in restaurants, a survey suggests. Most of them, 58 %, just round the bill off, leaving a tip of up to ten crowns, while only 15 % of Czech customers give bigger tips. The survey also indicates that the more education and higher income a person has, the bigger tip they leave. Unlike in most countries in Western Europe, it is not customary in the Czech Republic to leave a certain percentage, such as 10 % of the check.