Czech beer re-imported from Germany due to lower prices

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The Czech Republic’s entry into the European Union facilitated free trade with other members of the bloc. That was good news for Czech businesses, though it can result in paradoxical developments. One of the best known Czech beers Pilsner Urquell often retails at lower prices in Germany than in the Czech Republic - leading Czech wholesalers to re-import one of their country’s most famous brews.

In some stores and restaurants in the Czech Republic, you may come across bottles of Pilsner Urquell – perhaps the most famous Czech beer – bearing German labels. This is because of the lower wholesale prices of the product in Germany, leading individuals and companies alike to re-import Pilsner in an effort to save money or to make a greater profit.

The price of the famous beer has been on the rise in the Czech Republic for several years. The suggested retail price in 2000 was 14.60 Czech crowns; by 2009, it had increased to 19.90 Czech crowns.

Jiří Mareček is the spokesman for the Czech branch of the company that produces Pilsner Urquell, Plzeňský Prazdroj.

Foto: Štěpánka Budková
“There’s no way that we can dictate the retail price, we can only recommend it. The recommended price in Germany is 75 cents, which is roughly 20 Czech crowns, and it’s about the same as the recommended retail price in the Czech Republic.”

But special promotions of the Czech brew in Germany can lead to drastically lower prices and are the main reason for the paradoxical re-import of a Czech product from neighboring Germany. In addition, value added tax in Germany is lower than in the Czech Republic, and individuals can import up to 110 liters of beer per trip without having to declare it at customs.

According to data from the Czech Statistical Office, the value of all beer re-imported from Germany to the Czech Republic amounted to about 62 million Czech crowns in 2009 alone. But the estimates of Plzeňský Prazdroj are much lower.

“We can only estimate according to how many crates and bottles are returned back to the brewery with a German label, and the volume we estimate is about 1000 hectoliters.”

This represents only a small fraction of the 200,000 or so hectoliters of Pilsner Urquell that sells in Germany annually. Even so, both the German and the Czech divisions are displeased with this new trend, says the company’s Jiří Mareček.

“Pilsner Urquell is a famous beer and basically what the German wholesalers are doing is that they abuse our brand and sell it at special promotion prices to attract consumers to their shops.”

In 2010, the price of Pilsner Urquell in the Czech Republic is set to climb by another crown due to an increase in value added tax. While re-importing Czech beer from Germany is not illegal, retailers can be subjected to fines by the Czech Agriculture and Food Inspection Authority if they neglect to add a Czech label to the re-imported bottles, and can even ban the sale of such beer if it isn’t accurately labeled.