In Business News this week: the Czech government is thinking about selling off a substantial part of its stake in energy giant CEZ; Czech imports to Iraq have increased fourfold since 2003; Pilsner Urquell is to begin selling beer in vending machines, and the Finance Ministry wants to raise one of the country's VAT rates.
Government to sell off part of CEZ, newspaper reports
Czech daily Mlada fronta Dnes reported on Friday that the government is thinking of selling a 15 percent share in the energy giant CEZ. The state holds over two thirds of the shares in the company, which enjoyed record profits last year of over a billion US dollars. Proceeds from the sale of a 15 percent stake in the firm would amount to 80 billion crowns or 3.8 billion dollars, which the government would use to improve the country's roads and motorways. The sell-off would still leave the state as a majority shareholder in the company.
Czech Republic sees big increase in imports to Iraq
Czech imports to Iraq have been growing steadily since the US-led occupation of the country began in 2003. In particular, firms from this country have been winning orders for technical equipment required by Iraqi business. Despite the poor security situation in the country, Czech exports to Iraq grew from 17 million dollars in 2005 to 20 million dollars last year, which is a fourfold increase on exports to the country in 2003. The Prague-based Inekon Group is one of the Czech Republic's biggest investors in Iraq. It is currently building a 437-million-dollar cement works in the north of the country.
Pilsner to sell beer in special vending machines
The Pilsner Urquell brewery is to sell beer in special vending machines in a number of places throughout the Czech Republic. Previously such machines were not permitted because of the risk that underage drinkers would use them, but a Czech firm has now come up with a way of reading the buyer's identity card to ascertain if they are over eighteen years of age. The machine is thought to be the only one of its kind in the world at the moment. One hundred vending machines will begin selling beer in Prague and central Bohemia by the end of March.
European Commission must approve Billa-Delvita merger
Illustrative photo: archive of Radio Prague
The Czech Office for the Protection of Economic Competition has announced that the planned merger of Billa and Delvita supermarkets must be approved by the European Union before it can go ahead. The turnover of both supermarkets together is so big that it has to be reviewed by the EU's anti-monopoly office. The REWE group, which runs the Billa retail chain, wants to acquire 96 supermarkets owned by Belgian retailer Delvita. Last year both firms made a combined turnover of 34.5 billion crowns or 1.6 billion US dollars in the Czech Republic.
Finance Ministry wants to raise lower VAT rate
The Czech Finance Ministry wants to raise the country's lower VAT rate from 5 to 9 percent, according to the Euro Online news server. The ministry hopes that new higher rate will raise 25 billion Czech crowns in extra revenue, which will offset an income tax shortfall and help the country reduce its public spending deficit to below three percent. This is the level set by the EU for the adoption of the euro. The lower VAT rate in this country is applied to goods like food, books and newspapers. Finance Minister Miroslav Kalousek and the Minister of Labour and Social Affairs Petr Necas are to discuss the changes in the coming weeks.