One of the components of the savings package presented by the government on Thursday is a change in the tax on draft beer. The ten percent reduced VAT should rise to 21 percent from next January. In contrast, the consumption tax on so-called still wines still remains zero. Pilsenský Prazdroj fears that the increase in the rate for draft beer may threaten the village pubs, whose business is built primarily on this drink.
A fist between the eyes for all maltsters, barley growers and microbreweries, Luboš Kastner from the Association of Small and Medium Enterprises assesses the planned tax increase on draft beer. “The government is a Moravian political Palermo that has long preferred wine over beer,” Kastner said.
While the government raised the value-added tax from ten percent to 21 percent for draft beer in the austerity package, it left zero consumption tax for so-called still wine, despite the recommendations of the National Economic Council. Only sparkling wines are taxed, at the rate of 23.40 crowns per liter. “The government decided without impact analyses, did not consult with the professional public, and is liquidating the Czech gastronomy,” declared Kastner.
Zdeněk Kovář, the spokesman for Plzeňské Prazdroje, claims that the government’s decision will have a fatal impact mainly for village pubs, which, according to him, live on beer. “In the countryside, the consumer is very sensitive to any price change. Especially in smaller municipalities, the effects of the VAT increase will decide whether the pub will continue to operate or not,” he explained. Because of the investigation, some pubs are already limiting their opening hours to Fridays and weekends or only evening hours.
Kastner thinks businesses may start turning to the black economy to get around the laws. “I hope the government realizes the mistake soon. It is a step that will not have a positive effect on anyone. The difference between beer and wine just proves that we are not all equal in this country,” added Kastner.
VAT on draft beer in restaurants is thus returning to the level it was at years ago. In May 2020, it was reduced by the then government of Andrej Babiš (ANO) due to difficult times for pub owners, who had to keep their businesses closed for a significant part of the coronavirus epidemic.
According to spokesman Prazdroj Kovář, however, the difficult period for pubs still persists. “After two years of the pandemic, when catering establishments were closed for approximately 260 days, restaurateurs are now facing increased inflation for the last year,” he describes.
He points out that inflation is even higher in gastronomy than in some other areas. “For almost half of the businesses, beer is an integral part of their budget and sales,” Kovář said.
