Czech brewery Budvar’s profit drops 40% amid special operation
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The 127-year-old Czech brewery Budejovicky Budvar reported a 40% decline in net profit last year, to 201 million crowns ($9.3 million), reported AP agency with reference to the company’s financial statements.
Budvar itself attributed such dynamics to the conflict in Ukraine and high inflation. Exports decreased by 4%, while Budvar left Russia and Belarus shortly after the start of the special operation in February 2022. At the same time, exports to the UK, Slovakia, Austria, Italy, Spain and Canada increased. The volume of production decreased by 1.2%, to 1.78 million hl.
“I am very pleased that in 2022, an “extraordinary” year, when we stopped sales in the Russian market almost overnight, we were able to largely offset these losses in volume and sales,” CEO Petr Dvořák told Czech media (quote by Prime).
According to him, the sharp increase in the cost of energy, fuel and packaging materials cost the company $11.3 million.
October 2022 Dvorak saidthat due to the situation with the trademark law Budvar needs to return to the Russian market in the medium term. Until 2022, Russia was one of the five most important export markets for the brewery, accounting for at least 10% of all exports.
“In the future, it would be very risky to leave the Russian market for a long time. We also have a negative historical parallel from 1939 when Budvar left the US market during the turbulent pre-war period and we lost our brand name there,” he said.
Budejovicky Budvar has been in a permanent dispute over the Budweiser brand with the Belgian company AB InBev since 1911. Since 2013, the Czech brewery has been trying to obtain the exclusive right to use the name Budweiser Budvar in Russia, but at the end of 2014 Rospatent refused the applicant, wrote then Vedomosti. In August, the brewing company AB InBev Efes (established in 2018 after the merger of the business of Anadolu Efes and Anheuser-Busch InBev in Russia and Ukraine) localized the production of several brands of beer in Russia.
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