Czech beer lovers can drink no more DPA , PRAGUE Monday, Aug 29, 2005,Page 12 "We have reached the maximum per capita consumption -- 160 liters per capita, or 16 million hectoliters a year." Jan Vesely, spokesman for the Czech Beer and Malt Association The country that proudly wears the world's beer-consumption crown is pouring less at neighborhood pubs and exporting more of its precious brews abroad. It's a globalization strategy that Czech breweries are being forced to adopt because the country's domestic drinkers have simply filled their mugs of famous "pivo" to the limit. "We have reached the maximum per capita consumption -- 160 liters per capita, or 16 million hectoliters a year," said Jan Vesely, spokesman for the Czech Beer and Malt Association. "We can't expect any increase in consumption or revenues from the domestic market." That maximum rate has led the world for years, with Czechs edging out even the Germans and Irish in per capita quaffing. No this country of just 10 million supports about 90 breweries and still imports brands from as far as Mexico. But soon Czechs may lose their legendary consumption crown. Reasons include an ageing population, falling birth rate, changing diets and a growing taste for wine, especially among young adults. These days a stagnant domestic market is the best the Czechs can expect. "Thank God it's flat, because in other countries [beer consumption] is declining," Vesely said. Actually, the per capita consumption figures are skewed by tourism, since the millions of thirsty tourists who visit Prague and Czech spa towns every year contribute heartily to brewery sales. "It's the phenomenon of tourism that helps us keep up the domestic consumption," Vesely admitted. So breweries have responded by cranking up exports. Last year about 7 percent of the 18 million hectoliters brewed in the Czech Republic was shipped abroad -- a 60 percent increase in exports from the 1999 level. The main destinations were Germany, Slovakia, Britain, the US and Sweden. This year's exports are expected to climb another 12 percent, topping 3 million hectoliters for the first time and boosting the country's total brewery output to the highest level since 1990 -- the celebratory year after communism fell in the 1989 Velvet Revolution. Budejovicky Budvar is among the brewers setting the pace, with nearly half of its beer now being shipped abroad. Budvar the state-owned company locked in a legal battle for years with the world's largest brewer, Anheuser-Busch, over the product names Budweiser and Bud. Although the American beer is not sold in the Czech Republic, the Czech company recently got around the legal hurdle by renaming a product for the US market "Czechvar" -- and grabbing a new export niche. The largest Czech brewer and exporter is Plzensky Prazdoj, owned by the conglomerate SABMiller. Between 2003 and last year, Prazdoj's domestic sales were flat but exports rose 13 percent. That trend is expected to continue. Small are looking abroad, too. The Lobkowicz company in the village of Vysoky Chlumec, for example, is now exporting most of its annual output of 100,000 hectoliters, mainly to Germany. "We're seeing a lot of changes, even among the small brewers," Vesely said. In addition, Vesely noted that several Czech brewers are making or plan to make beer abroad under foreign licensing agreements, although that output is not counted with Czech exports. Lobkowicz, for example, said it's interested in finding an Asian licensee, while larger Czech firms have already gotten footholds in Poland, Russia and Slovakia. Proud Czech breweries generally attribute their export success to quality and flavor, but it's clear that they're also being driven by the flat domestic market. --

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