Why is Czech beer so damn cheap?

Beer is probably the oldest alcoholic drink in the world, and there's no doubt that here in the Czech Republic it's also the most popular. Average per capita beer consumption is about 160 litres per year, meaning that Czechs drink more beer than anyone on the planet. And after a hot summer day, for the majority of Czechs there's nothing better than a cool glass of beer in a shady pub garden. But while in other countries the price of a beer is well above the price of petrol, Czech beer remains extremely cheap. Zuzana Smidova is here to explain why.

Czech beer is good and cheap, depending on where you order it. A pint of Budweiser - and I mean the Czech variety - in a British pub would set you back two and a half pounds, over here it costs around 35p. How is this possible? Is it because beer is a Czech national drink and the producers have strong nationalistic feelings, or because the competition here is so tight?

Representatives of small and medium-size breweries claim that low beer prices have nothing to do with national sentiment. It's purely a marketing strategy, they say, to push the small breweries out of business, because smaller breweries have higher production costs. According to the Czech newspaper Lidove Noviny, only the two biggest breweries and a handful of small ones made a profit last year. The rest are struggling. It is almost impossible for many breweries to raise the price of their beers, as customers demand is very flexible and the choice of rival beers extensive.

The big breweries deny adopting such a strategy. A Plzensky Prazdroj spokesman told Lidove Noviny that beer was the Czechs' national drink, and that the Czech currency was not as strong as elsewhere in Europe. Although Prazdroj have slightly increased their prices, they are not planning any further major increases in the future. The same strategy is expected in the case of the country's second biggest brewery, Budwar, too. And so it's good news for beer lovers, but bad news for the small breweries.