Catastrophic year for distilleries, opening path for black market
According to the Distillers' Union, the distilling season in Czechia will be particularly bad this year. Fruit distillate production is expected to fall to about one fifth of last year's level – which was already bad. Between 20 and 30 percent of distilleries will not reopen because they are no longer profitable, the Distillers' Union has warned. As a result, the black market has also seen surges.
This year, the fruit harvest has been particularly bad in Bohemia. In Moravia, the season has been slightly better, but in contrast to previous summers, it has still been a lot worse.
Secretary of the Distillers' Union Jakub Gottwald spoke to Czech Radio about the ramifications of this year’s poor harvest for distilleries across Czechia.
“The soil is not good this year. This primarily refers to Bohemia; in Moravia, it’s slightly better, but it’s also not great. In Bohemia, especially in central Czechia, it’s almost as if the season didn’t happen. Next year, most distilleries will not even open or they will open part-time for a few harvesters who had a small harvest. Contributing to [the problem] is not only the season for fruit but also the consumer tax that has driven the price up. That means that for some, even if they have the fruit, they will decide to do something else with it.”
Mr. Gottwald says that we see a similar pattern in 2023.
“Well, last year was not that good either. Last year was worse than the long-term average of about 30 to 40 percent. This year it’s truly catastrophic. A lot of distillers who are close to retirement do not remember a time like this.”
Mr. Gottwald warns that a shortage in the supply of distilleries could lead to a rise in the black market. He explains that if around 100 of the 400 distilleries that currently serve local farmers shut down due to a 30% shortfall, owners will either start distilling on their own or turn to the black market. This situation would create a path for illegal distillation, bypassing state regulations.
However, we cannot know for certain how many of these distilleries have chosen to participate in the black market. Educated guesses suggest that it could be comparable to the amount in official sources.
Undercover distillers are particularly popular in Moravia where state regulations might have to constrain the black market there, especially since Bohemia’s harvest has been so much worse. The process of legally growing spirits is not that complicated, Mr. Gottwald explains, adding to the difficulty of regulating the process.
“You have to comply with a few conditions. You have to own or rent a garden. The fruit that you are distilling has to come from your harvest. You have to then go to the local distillery. You find out if you have to provide your own yeast or if someone can do it for you. The distillery will distill it for you, and then they subtract a consumer tax for the distillery as well as a payment for the entire service they have done for you.”
