Business News

Photo: European Commission

In Business News: the minimum wage is to increase slightly from July; Czechs are spending less on household insurance relative to earnings; Plzensky Prazdroj is to invest heavily into its brewing technology; lower VAT on coffee, tea and chocolate takes effect on July 15.

Minimum wage to rise from July

The Czech Republic's minimum wage is set to rise from 334 dollars to 351 dollars a month in July, the labour minister, Zdenek Skromach, said this week. He said this rise would motivate people to choose a low-paying job ahead of social benefits. The Labour Ministry estimates 2 to 3 percent of Czech workers will actually earn the minimum wage. It is far short of the average salary, which stands at almost 900 dollars a month.

Spending on insurance slows

Household spending on insurance in the Czech Republic is lagging behind growth in incomes, according to the Czech Statistical Office. It says even the flooding which hit large parts of the country in 1997 and 2002 did not spur Czechs to invest more into insuring their property.

Plzensky Prazdroj to make big investments over next half decade

The Czech Republic's largest brewer, Plzensky Prazdroj, is to make considerable investments over the next five years, one of its senior managers said this week. Of a total of almost 200,000 dollars, up to 70 percent will be invested in the company's main plant in Plzen. The rest will be used to buy new tanks for fermentation and ageing for its Radegast and Velke Popovice breweries. Plzensky Prazdroj is part of the SAB Miller group. It sold over 10 million hectolitres of beer in the last financial year.

Elections, football contribute to slight rise in web visits

Nearly 4.4 million people visited Czech internet sites in May, slightly up on the figure for the previous month. Experts attribute the rise to the general elections, the World Cup - and bad weather. The most popular Czech site in May was the search engine Seznam, followed by the news site Novinky, which is connected to the daily Pravo.

Lower VAT on coffee, tea to come into force as of July 15

Lower VAT on coffee, tea and chocolate confectionery will come into force on July 15, the Finance Ministry said on Friday. Dealers have indicated that prices will fall but not by the full 14 percent. Under the new law, only alcoholic beverages will remain in the basic 19 percent VAT bracket.

Ruzyne's profit up by 45 percent

Ruzyne Airport
Prague's international airport, Prague-Ruzyne, made a net profit of 1.432 billion crowns (63.34 million dollars) in 2005, a 44.9 percent jump from a year earlier, according to director Hana Cernochova. Turnover at the airport - the busiest in Central Europe - increased by 5.0 percent to 4.385 billion crowns (193.9 million dollars), Cernochova said. The airport expects a profit of around 1.0 billion crowns this year. Prague airport became the busiest airport of the 10 countries that entered the EU in 2005 after passing the 10 million passenger mark. A total of 58 airlines offering 118 destinations currently operate there.

New Czech phone company created through merger

A new Czech phone company, Telefonica 02 Czech Republic, is to be created on July 1 from the merger of fixed line operator Cesky Telecom and its wholly-owned mobile unit Eurotel, company directors announced Wednesday. Cesky Telecom CEO Jaime Smith said that most of the rebranding for the merged unit should be completed by the end of the year. In the first year of its existence the new company will merge sale and customer care, in the second year it will focus on the domestic market segmentation and in the third year on IT integration. Telefonica of Spain bought Cesky Telecom last year, and now controls 70 percent of the company. Telecom is the sole owner of Eurotel.

Three in four Czechs fear euro will bring higher prices

Photo: European Commission
Despite the reassurances of economists, three in four Czechs are afraid prices of goods and services will go up after their country switches to the euro. This view was expressed not only by opponents of the euro, but also by two-thirds of its advocates. The official target date for adoption of the euro is 2010.

Inventec Appliances to build a support centre in the Czech Republic

Inventec Appliances, a producer of electronic parts, is planning to build a support centre worth about 100 million crowns in the Czech Republic, according to the DigiTimes web daily. "The construction of a support centre would be followed by the construction of a plant to assemble electronic equipment," DigiTimes says, adding the plant could be completed at the end of this year. Inventec Appliances produces video iPods for computer maker Apple.