FOOD INDUSTRY

1928 2018

COMPETITIVENESS OF CZECH FOOD INDUSTRY CZECHS´ AFFECTION FOR WINE IS GROWING

PROGRESS OF DIGITALISATION IN AGRICULTURE ORGANIC FOOD IS GAINING IN POPULARITY TRENDS AND DEVELOPMENTS IN BREWING

FOOD INDUSTRY 4 2018

BYLINY Mikeš s.r.o. Číčenice 114 | 387 71 Číčenice | Czech Republic Phone: +420 383 382 364 | gsm: +420 721 914 441

www.bylinymikes.cz

More than 25 years of experience More than 300 different kinds of herbs High quality of products Modern technologies Wide use of products (foods, liqueurs, feeds, extracts...)

Processing in service Certification ISO 22000, Organic

CZECH BUSINESS AND TRADE

Czech Business and Trade – With a Tradition of 90 Years Economic Magazine is Designed for Foreign Partners, Interested in Cooperation with the Czech Republic Issued by PP AGENCY s.r.o. in cooperation with n Ministry of Industry and Trade of the Czech Republic n Ministry of Foreign Affairs of the Czech Republic n Ministry for Regional Development of the Czech Republic n Confederation of Industry of the Czech Republic n Confederation of Employers‘ and Entrepreneurs‘ Associations of the Czech Republic n Czech Chamber of Commerce n CzechTrade PARTNER OF THE MAGAZINE: ICC Czech Republic EDITORIAL BOARD: Vladimír Bärtl, Jiří Hansl, Marcela Havlová, Jaromír Kohlíček, Dagmar Kuchtová, Martin Lukáš, Karel Machotka, Marie Pavlů, Tomáš Seidl, Miroslav Somol, Jarmila Škvrnová, Martin Tlapa, Jan Wiesner MANAGING EDITOR: Pavla Podskalská EDITOR: Jana Pike TRANSLATION: Vlasta Benešová PROOFREADING: Ivana Kadlecová, Pearl Harris GRAPHIC DESIGN: Stanislava Podaná COVER PHOTO: Shutterstock.com

n INTRODUCTION

Questions of the Month for Miroslav Toman, Minister of Agriculture

n ANALYSIS

Competitiveness of Czech Food Industry Czech Alcoholic Beverage Market Is Growing

n TREND

Progress of Digitalisation in Agriculture

n ANNIVERSARY

Oxalis: 25 years of Tea and Coffee AKINU CZ s.r.o.

n WINE

Czechs´ Affection for Wine Is Growing Czech Wines in Figures Czech Wines and Sparkling Wines Have a Well Deserved Place in the World Market

n ORGANIC FOOD

Organic Food Is Gaining in Popularity Bio-Food Exports Are Growing

n BREWING

Popularity of Czech Lager Is also Growing in Other Countries Trends and Developments in Brewing Czechs Enjoy Beer Tourism

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DEADLINE: 16/11/2018 © PP Agency ADDRESS: Myslíkova 25, 110 00 Praha 1 Czech Republic e-mail: journal@ppagency.cz www.ppagency.cz, www.doingbusiness.cz Press run: 10 000 copies. It is not allowed to reproduce any part of the contents of this journal without prior consent from the Editor.

Attitudes expressed by the authors of articles carried by CBT need not necessarily be consistent with the standpoint of the Publisher.

MK ČR E 6379, ISSN 1211-2208 „Podávání novinových zásilek povoleno Českou poštou, s. p., odštěpný závod Přeprava, č. j. 3468/95, ze dne 24/10/1995“

n INTERVIEW

Greatest Barrier to Faster Growth is Labour Shortage

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n PR

Bohemiachlad – Partner to Demanding Clients Seeking the Best in the Area of Cooling Devices Unique Projects of LabMediaServis

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n PRESENTATION OF FIRMS

ABF, a.s.; AKINU CZ s.r.o.; Bisnode Česká republika, a.s.; BOHEMIACHLAD spol. s r.o.; BYLINY Mikeš s.r.o.; EXTRUDO Bečice s.r.o.; J 4 s.r.o.; LabMediaServis s.r.o.; LINDR.CZ s.r.o.; L'OR special drinks s.r.o.; Marmelády Šafránka s.r.o.; MCAT AUTOMATION s.r.o.; OMNIPOL a.s.; OXALIS, spol. s r.o.; Pivovar Clock s.r.o.; PRIMÁTOR a.s.; Templářské sklepy Čejkovice, vinařské družstvo; The Candy Plus Sweet Factory, s.r.o.; Vinařství Petr Skoupil

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INTRODUCTION

Questions of the Month for Miroslav Toman, Minister of Agriculture

What are your priorities as Minister of Agriculture with regard to the promotion of exports and business in 2018 and 2019?

The essential thing in the years to come is export diversification and less pronounced orientation towards the often saturated and in some respects even unstable EU market.

The growing volume of agrarian exports and the broadening range of exported products have assured me that Czech firms have already come to see that they can succeed even in relatively more distant and rather big markets and that this trend should be supported in the long run. As an example I would like to mention China, where Czech agrarian exports showed a massive increase, of nearly 60 %, in comparison with 2016.

I am most pleased that we have made such progress in export promotion in the past few years. Of great help to our food producers and processors in foreign markets are agrarian diplomats and local agro-business representatives of the Czech Republic.

We have long been striving to establish this position in selected destinations and now we can see that, although overall agrarian exports last year declined slightly, in countries where agricultural diplomats operated, agrarian exports in that period showed | 4

an increase, by as much as nearly 20 %. In this respect, it is important to map out the specific demand in different markets, while seeking export opportunities in third countries, such as the post-Soviet republics, the Balkans, the Near East and naturally also in the populous and rapidly developing areas of East and Southeast Asia. This is our aim for the future, where we will also rely on the greater involvement of the professional unions and chambers in our sector, for example in the form of business missions and participation in international exhibitions.

On the other hand, it is true that currently international trade is hampered by new, non-tariff obstacles applied, for example,

by China and Russia. Even such obstacles must be surmounted with the help of our agro-diplomats. In general, I am optimistic and convinced that the Czech quality, tradition and skill will score success, not only next year and not only on the Asian markets, but also in the long-term perspective and in ever new markets.

You have been in the agrarian business for a number of years. Where do you see special opportunities and, on the contrary, dangers in the agrarian sector?

How is the Czech Republic doing in

Do you see any strong trend or expectation that will influence Czech agriculture?

Such trend is the broader use of precision agriculture, which the Ministry of Agriculture supports. In the Czech Republic, precision agriculture is being developed especially in the case of harvesting machines and tractors using GPS and other navigation technologies. Precision agriculture, however, must also be developed in the application of plant protection preparations. The Ministry of Agriculture exerts maximum effort to make wider use of new innovative processes, including support in the framework of the National Agency for Agricultural Research programme.

Precision agricultural procedures have their place in the Rural Development Programme as part of the grant support offer to agricultural enterprises for the modernisation of their machinery equipment.

Czech agriculture is and will be influenced by the effects of climate change. This involves two main types of danger for agricultural and forest areas – warming and weather instability with a higher number of extreme situations during the year. There are other partial impacts devolving from these phenomena: broadening of regions affected by agricultural droughts and greater frequency of extreme situations in unforeseeable periods.

The key measures for the prevention of climate change and adaptation to them can be summed up as adaptation and prevention measures with a combined effect on the quality of the soil, water (with emphasis on water retention in the landscape) and biodiversity in the agricultural landscape.

Photo: Ministry of Agriculture archives, pixabay.com

comparison with other Central European countries?

For Czech enterprises, opportunities exist especially in products with higher value added, such as special foods and beverages, or animal genetic material and seeds. Czech products such as beer or collagen casings are very well known in the world. But I am persuaded that our producers can make many more high quality products that can stand international competition. For example, the Czech Republic, which is rather an industrial country, has the highest number of EU protected geographical indications of foods among the former eastern bloc countries, in which the quality is based on the precise place of origin and tradition of production.

CZECH BUSINESS AND TRADE

Competitiveness of Czech Food Industry Food production is a traditional manufactring sector of Czech industry of strategic importance.

Its importance is augmented by the fact that its products provide livelihood for the population.

Great emphasis is placed on the required quality and quantity and, in the basic foods category, also on self-sufficiency.

The decisive part of production, especially as regards the leading and larger firms, is based on industrial processing using digitalisation and robotisation. These companies are predominantly owned by foreign capital. Some of the smaller companies still rely on craft production and place their products on local markets. Most sales of the bigger companies are realised through retail chains. Food is sold either over the counter, or it can be ordered from e-shops; the latter choice is becoming increasingly popular and is linked with the logistic system using modern warehousing systems.

n DEVELOPMENT OF THE SECTOR The supply of food is extremely wide-ranging, from fresh foods with a short shelf life to durable products. Also in supply are eco- and farm products. Food production is divided according to the way the agrarian raw materials are processed, so that the structure of the CZ-NACE 10 section is relatively complicated. The basic division is into vegetable and animal production. The development of the sector depends primarily on the situation in the key sections.

Animal production includes meat processing and preserving and the manufacture of meat products, the assortment of which is continuously expanding, with its durability being extended. Over the years, meat production has been showing a declining trend. This concerns beef, whose production, together with veal, amounted to 67 714 tonnes in 2017, 5.9 % less than in the previous year. Therefore, the demand had to be compensated for by import. The main type of meat, pork, which is a traditional meat used in Czech cuisine and the prevailing kind of meat contained in meat products, in 2017 amounted to 211 001 tonnes, 4.2 % less year on year. That is why the authorities concerned decided to support the restructuring of meat production and strengthen its competitiveness. The support is targeted especially at pig rearing, from both national and EU resources.

This signifies investment in technologies and the improvement of animals´ living conditions. Poultry meat and other kinds of meat are becoming increasingly popular In 2017, their production slightly increased, to 158 906 tonnes (+1.5 %). Mutton

and rabbit meat are less popular and their production is relatively low. Consumers prefer fresh meat, as shown by a recent survey. Milk and dairy produce production fluctuates from year to year, mainly due to the excessive piling of these products and changes in consumer preferences.

The dairy sector in the Czech Republic, which is relatively closely linked with the world market, has experienced a complicated period recently. The situation in the milk market, including cream and butter, has become stabilised to a certain extent.

This concerns especially the year 2017, when dairy produce prices increased. In 2017, 2 901.0 million litres of milk (+6.7 %) were purchased directly from domestic producers, which included 2 478.1 million litres (+0.8 %) purchased by dairies from producers. A key group dependent on vegetable agrarian production is that comprising bakeries, confectioneries, and other flour product manufacturers. Bakery production belongs to the fast-moving goods category and bread and bakery production to the everyday consumption goods category. The nutritive value of these products 5 |

ANALYSIS

is linked with their roughage content. The current structure of bakery production, including bread, is very broad. Its production is declining, the same as the production of other bakery products. The current trend is the growing proportion of packed goods in this group, which of course has an impact on the costs. The above-mentioned group forms an important base for all sizes of enterprises with more than 40 % of units within the sector scattered all over the Czech Republic. With its 30 % share of the total number of people working in this section, the group is an important employer.

This proportion, however, is declining on a long-term basis and is showing a shortage of apprentices, a trend which also applies to other food industry sectors. Other groups mentioned above, although not of key importance, are a utility value, playing an important role in the food market.

n MAIN ECONOMIC INDICATORS declined). Prices reached the climax in 2013, after which they began to show a downward trend. In 2017, economic profit creation rapidly worsened in comparison with the previous year, when this indicator had been showing nearly positive values. This means that the enterprises concerned did not create value for their owners. The reason causing such a worsening of the value of economic profit was mainly the development in group 10.9. In 2017, positive val-

Classification of CZ-NACE 10 10.1 Processing and preserving of meat and meat product production 10.2 Processing and preserving of fish, crustaceans and molluscs 10.3 Processing and preserving of fruit and vegetables 10.4 Manufacture of vegetable and animal oils and fats 10.5 Manufacture of dairy produce 10.6 Manufacture of grain mill and starch products 10.7 Manufacture of bakery and farinaceous products 10.8 Manufacture of other food products 10.9 Manufacture of prepared animal feeds

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ues of economic profit were achieved by groups 10.5, 10.6, and 10.9.

n EXPORT AND IMPORT The export of food products (CZ-CPA 10) in the years under review began to increase in 2015. Thereafter, in 2016, the export was stagnant and in 2017 it showed a decline.

Import, on the other hand, increased until 2016 and in 2017 it was stagnant. The export trends testify to the ability of producers and business managers to maintain their positions in foreign markets and even penetrate into new territories in spite of keen competition. On the other hand, food import realised by both the retail chains and manufacturing, mainly meat processing enterprises, increased. The total balance of trade in the products mentioned above was negative during the entire 20092017 period. The decisive import territories as regards CZ-CPA 10 products in 2017 (the same as in 2016) were neighbouring Germany and Poland, both EU members. As regards the export of those products, the largest territories were Slovakia, followed

by Germany and Poland.

n RESEARCH AND DEVELOPMENT The indicator characterising progress in research and development in CZ-NACE 10, i.e. the volume of expenses for R&D, is showing a reduction in the years 2014-2016

Photo: pixabay.com

The development of selected indicators in the 2008-2017 period was strongly differentiated. The number of units in that period increased from 5 317 to 7 953, while the number of employees was declining until 2014, when employment figures began to go up again. The revenue and value added indicators were practically stagnant in the entire period under review. Except for the year 2012, labour productivity and average wages grew slightly (in 2012, productivity

CZECH BUSINESS AND TRADE

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in comparison with the years 2010-2013. In the 2010-2016 period, research and development expenses in CZ-NACE 10 were financed predominantly from company sources. In 2016, R&D amounted to CZK 223 million and accounted for 1.28 % of total R&D expenses in the manufacturing industry. In 2016, this section showed a 31 per cent decline in R&D expenses in comparison with 2010. The decline was due primarily to lower public expenses from abroad. Research workers (FTE) account for 1.62 %, i.e. 127 researchers a year, of the total number of researchers in the manufacturing industry sectors (annual averages in the 2010-2016 period). Firms which drew a considerable volume of support from the state budget under the national programmes of the Ministry of Industry and Trade (IMPULS, TIP, TRIO) and TA ČR (Alfa, Competence Centres, and Epsilon) between 2004 and 2017 include RABBIT Trhový Štěpánov a.s., EcoFuel Laboratories s.r.o., AMR AMARANTH a.s., and FAVEA a.s. The firm EcoFuel Laboratories s.r.o., for example, participated in the ALFF project: The Algal Microbiome Friends and Foes (Horizon 2020), focused on the use of plant aquacultures in the food, chemical, and pharmaceutical industries. In the framework of the PIK Operating Programme, 21 projects coming under the National RIS3 Strategy plan were approved for realisation between 2015 and October 2017, with planned support (EUk, public CR and private CR sourses) to the amount of CZK 0.9 billion, of which EU subsidy amounts to CZK 0.28 billion. Most of the support (96 %) is aimed at company innovation programmes, especially at strengthening companies´ research and development capacity (96 %). Practically all these programmes correspond to the Sustainable Food Production application sector. As regards EU support, the largest beneficiaries are Pekárna Zelená louka, a.s. in the Central Bohemia Region (innovation line for the production of PENAM a.s. toast bread; total expenses of CZK 400 million, of which EU subsidy amounts to CZK 100 million); among small and medium-sized enterprises, MARLENKA International s.r.o. in the Moravia-Silesia Region (honey product

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ANALYSIS

innovation; total expenses CZK 248 million, of which EU subsidy was CZK 87 million).

IMPORT TERRITORIES IN 2017 (%)

n PROSPECTS OF THE SECTOR Food production is a relatively large section consisting of a number of branches related to agriculture. Its key role rests primarily in the production and supply of foods intended to feed the population.

Foodstuff is supplied mainly to the domestic market, but the export of some of it is also important. The food marking system makes it possible for consumers to see what food they are buying. Under Czech legislation, food products must feature information about the origin of the foods and when they can use the “Czech Food” label. Certain high-quality foods are entitled to use the KLASA national label, while local specialties may use the Regional Food label. As a means of protection, Czech and EU foods of extraordinary quality may use a special trademark – protected designation of origin, protected geographical indication or guaranteed traditional specialty indication. The latest Czech product to have won this indication is “Prague Ham”.

Own capital of the section is growing on a long-term basis. The value added volume has been growing since 2014. A favourable development is also shown by revenue from the sale of own products and services. The profit before tax indicator increased especially in 2016 and about the same result is expected in 2017. The growth of value added has also been favourable since 2014. The expectations are that, in 2018, investments will continue to grow especially as regards modernisation. On the other hand, no improvement has been shown to date by the financial indicators. In foreign trade, the unfavourable balance persists and, in 2017, it showed a further worsening. The cause is deterioration on the side of export, with import remaining stagnant.

The main export territory of the Czech Republic in the year under review was Slovakia, accounting for 26 % of total export.

As regards import, most food products, some 25 %, arrive from Germany. In future, the situation could be changed by agrarian diplomats and other measures. The situation could be improved by higher investment in science and research, especially applied research. The prospects of the section should be based on the main strategic | 8

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Source: MIT archives

EXPORT TERRITORIES IN 2017 (%)

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Source: MIT archives

Agriculture: Manufacturers´ Prices Increased, the Number of Workers Remained Practically Unchanged The year-on-year development of market conditions has been favourable for Czech agriculture. In 2017, the prices of agricultural producers rose by 8 per cent on an average, in livestock production the increase was more than 14 per cent. Profits of the agricultural sector in the past few years remained on a relatively high level. Last year the profit was CZK 21.3 billion.

In year-on-year comparisons, 2017 shows a slight decline according to the aggregate farm account, but, comparing the results in the sector in the last five years, the year 2017 appears to be one of the more successful. The economic result of the agricultural sector was CZK 133 billion, the same as in 2016. Crop production declined from CZK 79.8 billion to CZK 73.7 billion in 2017. Animal production rose from CZK 45.5 billion to CZK 51.4 billion. Services provided in

2017 were worth CZK 7.9 billion. Agriculture accounted for 1.78 % of total value added generated in the Czech Republic, about the same as in the preceding year.

The total subsidy paid to farmers directly in 2017 increased by 5.7 % and amounted to CZK 45.5 billion. This is nearly CZK 13 000 per hectare of farmland.

Employment in agriculture has been dropping at a very low rate in recent years, so that the situation may be considered stabilised. In 2017, the number of workers employed in agricultural enterprises dropped to approximately 100 000, a 0.2 per cent decrease year on year (in comparison with 0.7 % in 2016). This is the total number of people working in agriculture, which means employees and other workers (including farm owners).

Wages in agriculture, including forestry and fisheries, are below the level of wages paid in industry and the national economy as a whole. Last year, wages in agriculture rose by 5.4 % to CZK 23 713.

CZECH BUSINESS AND TRADE

priorities, specifically higher self-sufficiency, greater competitiveness and efficiency of food production, food safety and consumer protection. For the Czech Republic, a country with an open economy, it would be desirable to strengthen the ties of manufacturers with the local farming sector. As regards sustainable development, this will require a friendlier approach to the environment, which also involves Industry 4.0 issues and the need to reduce energy intensiveness and the creation of intelligent food industry logistics. With the oncoming digitalisation, firms will be able to react more promptly to the changing demand for food, both as regards mass production and local artisan firms.

n REVIVAL OF SLAUGHTER PIG

PRICES IN THE CZECH REPUBLIC

Last year´s cereal harvest in the Czech Republic amounted to 7 456.8 thousand

tonnes, 13.3 % less than in the preceding year. Traditionally, wheat accounted for the largest proportion (63.3 %) of total cereal production, followed by barley (23 %) and grain maize (7.9 %). The number of heads of cattle rose slightly, by 0.4 % (5.6 thousand head) to 1 421.2 thousand head, of which the number of cows increased by 0.4 % (2.2 thousand cows). In 2017, the Czech Republic accounted for 1.6 % of the total number of heads of cattle reared in the EU. The average annual milk yield rose by 2 % to 8 222.5 litres per cow.

Cattle breeding in the Czech Republic is traditionally concentrated in larger farms.

There were some 118.5 thousand cattle-breeding farms in the Czech Republic in 2017, according to central statistics, 43 less than in the previous year. In 2017, the Czech pork market was strongly influenced by the development of this sector in the EU. The decline of production in the

EU, accompanied by the growth of pork prices, caused a revival of slaughter pig prices in the Czech Republic and had a favourable effect on pig rearing. The total number of pigs decreased and so did total production, which resulted in growing pork imports.

At the end of 2017, there were 4 399 ecofarms in the Czech Republic, 3.7 % more than in 2016. The number of eco-foods increased significantly. Altogether 672 eco-farms were registered in the Czech Republic at the end of December 2017, 10.7 % more year on year. The surface area of farmland using the eco-farming system last year accounted for 12.37 % of the total farmland surface area.

The turnover of the Czech agrarian foreign trade in 2017 showed a slight decline of 0.2 %.

The value of export dropped by CZK 4.5 billion to CZK 197.1 billion. The value of import rose by CZK 3.7 billion to CZK 228.3 billion.

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TREND

Progress of Digitalisation in Agriculture

For example, robots instead of the milkmaid to milk the cows and perform various other functions are no longer a vision of the future. There are more than 200 such machines in the Czech Lands and their popularity is continuously growing.

They are devices which can identify individual cows and evaluate whether they are in a condition to allow their milking. If they are, the robot will carry out the milking operation without the need of a human hand and send the cow back among the other animals. | 10

n CZECH AGRICULTURAL START-UPS Several start-ups have been set up, which bring new technologies and processes into this traditional sector. Farmers have the choice of a number of smart solutions, making their work easier and leading to higher efficiency. The start-ups specialise in different activities – for example, the development of software, sensors, drones, etc.

They include new generation farms, marketplaces and workplaces analysing rearing and cultivation data. One of the startups devotes itself to the development of mapping software, which makes it possible to obtain images of farmland directly from the satellite. As a result, farmers can run their farms with the use of “remote” control. Another Czech start-up is a company which has developed a modern method of fish breeding based on water recirculation.

* CLEVERFARM START-UP

CleverFarm was established in 2016. It belongs to a group of projects of the successful young CleverMaps firm. Just like the parent company, the start-up works with smart maps. These are maps that can visualise the farmer´s fields cartographically and insert into it data from the cadastre, satellite images, accounting documents, meteorological observations and much more. For example, the basic CleverFarm application, which is free of charge, will complete the map of the farmer´s fields with information about how their owner stands as regards the fulfilment of various agricultural and environmental regulations, such as the EU Nitrate Directive. It will show him the fertilisation and spraying records it keeps for him and inform him about the latest stock level figures. It also provides a weather forecast for three days ahead.

A farmer wishing to get more information can buy three additional modules. The first offers access to satellite images of his fields, showing temperature changes and rainfall, the condition of the vegetation, and biomass development. From this information, the farmer will discover which parts of his fields need more fertilising and which less. If the farmer has smart machines, he can feed such data into them and they will control the fertilisation process themselves. The next module us-

ing on-line sensors, monitors the temperature and moisture of the plants and the soil in the field. This information serves as a warning against potential diseases and pests. Other sensors monitor the temperature and humidity in the stores. Part of the module is a small meteostation. The farmer can follow the current situation in the field and the barn from his home on his mobile phone or computer. The third CleverFarm module can read current information from the cadastre and see if the lease or ownership agreements have not expired. It also keeps an overview of paid rentals and will calculate the tax return upon request.

Although Brno´s CleverFarm is only getting its activities started, it is already reaping success in the Balkans – specifically in Serbia. The farm is planning to enter the markets in Slovakia, Ukraine and Poland, and in far-away Malaysia. The typical client for its services today is the farmer and the agronomist, but with the development of smart sensors, it also wants to cover orchards, vineyards, and beehives.

* FISHRAS

FishRAS is a young start-up specialising in fish breeding and production, using a method based on the recirculation aquaculture system (RAS). This method, where the water is recirculated between the tanks, causes the minimum burden to the environment. It saves water, with losses being a mere 3 %. Therefore the founders of the start-up are seeing in their invention a potential for development programmes in third world countries. This project by a student of the Czech Agriculture University won the Student Start-up Battle, organised in the framework of the Start-up World Cup& Summit Conference in 2017.

n FOSFA´S VISIONARY PROJECT A special chapter of Agriculture 4.0 is hydroponic farms. They may have the form of today´s ordinary home plant boxes, where it is sufficient to plant a seed and, on the mobile application, start one of the pre-set programmes for different types of plants which will ensure their successful growth (including automatic watering, fertilising, lighting setting of the correct climate and cloud monitoring). Alternatively, they may

Photo: DataBio archives

Just as Industry 4.0 is becoming a frequent term used in industry, so is Agriculture 4.0 becoming a frequently used term covering robotisation and automation.

Tractors are controlled by navigation, their drivers are more or less their operators and the machines are often more sophisticated than the best cars.

Digitalisation has pervaded both animal and crop production.

Cows are milked by milking robots and, in crop production, farmers use precision tools and equipment. Digitalisation and the interconnection of all the elements of the production process make it possible to supply better and individualised products and services, raise productivity, reduce costs, and stand the ground in the face of keen competition.

CZECH BUSINESS AND TRADE

have the form and size of a specially adjusted transport container that will yield a harvest equivalent to the production of a two-acre farm. In comparison with the same volume of plants grown in the field, they will release less than one-tenth of greenhouse gases and will consume 90 % less water. The first vertical farm was built in the Czech Republic in 2017. It is situated in Břeclav, on the premises of the Fosfa chemical plant. The crop grown there is vegetables, on a surface area of approximately 60 square metres, divided into five levels. It took Fosfa three years to develop the farm. All the technologies the farm uses are by Czech suppliers, with the exception of LED lighting. Although Fosfa is mainly a chemical factory, the vegetables grown there are cultivated totally without the use of chemicals. The air entering the cultivation space passes through filters, so that the crop is protected from unfavourable elements from the outside, such as diseases and pest germs. That is why the vertical farm functions completely without pesticides. A similarly intelligent method will be used, for example, in the greenhouse being built in Velké Němčice in the Břeclav District, where tomatoes will be grown. There too, most of the processes will be controlled by computer and the tomatoes will grow without the use of soil, only in a nutrient solution. Even the bumblebees that should pollinate the plants will be computer-controlled.

n PARTICIPATION OF CZECH

SCIENTISTS

Another interesting project is DataBio. With its capacity to process large volumes of data, this project with the participation of geomatics and information technology specialists from the University of West Bohemia (ZČU), is designed to assist the development of a sustainable bio-economy in Europe. The project, co-financed with funds of the EU Horizon 2020 Programme, comprises 26 pilot applications in the area of bio-economy. ZČU geomatics experts participate in three of them. The research team of experts from the ZČU Faculty of Applied Sciences, consisting of five geomatists and one information technology expert from the Department of Informatics of the same faculty, pro-

vide technologies for large data administration and visualisation in the framework of DataBio, especially in the area of sensoric and other three-dimensional data. ZČU geomatists are developing a system for heterogeneous sources of SensLog sensoric data. In the framework of the Agricultural Technology Administration project, the team processes, for example, detailed information about the speed, position and consumption of tractors and other agricultural machines. The telematic data received from the tractors and other types of agricultural machines are analysed and compared with other agricultural data. The principal aim is the collection and integration of data needed for making comparisons. An advantage of this pilot project is that one agricultural enterprise can have technical equipment and devices from different manufacturers, using different telematic solutions and the principle of data ownership or sharing. Experts of the ZČU Faculty of Applied Sciences also participate in the project: Cereals, Biomass, and Weaving Plants. Its aim is the development of the GIS web platform for plant vitality mapping. For this purpose, the remote Earth survey is used as an auxiliary instrument for the variable application of fertilisers and plant protection. The team processes data from ground humidity sensors placed in the

soil, as well as data provided by drones and satellites, which make it possible to interpret the condition of the vegetation and potentially also the groundwater status. In this connection, the ZČU University team of geomatics also concerns itself with 3D data modelling and visualisation.

Its outcome is, for example, a pilot application for the web visualisation of estimated yields in crop production shown in 3D. The application is currently being tested at a farm in Roštěnice, not far from Brno. Another project which the Faculty geomatics are developing concerns fishing. With the aid of satellite data and data from fishing buoys, the Czech team will contribute to more environmentally friendly and sustainable tuna fishing. The ZČU Faculty of Applied Sciences is one of 48 partners of the DataBio consortium based in 17 countries worldwide. The project uses more than 90 of the most up-to-date large volume data processing technologies, earth observation and information and communication technologies, which are interlinked through the DataBio platform. The aim is to contribute responsibly and by sustainable methods to the production of the best possible raw materials within the framework of the three above-mentioned sectors and to ensure better quality food, energy and biomaterial production.

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ANNIVERSARY

Oxalis: 25 Years of Tea and Coffee In Europe’s expanding speciality tea and coffee sector, Oxalis is proud to be recognised and respected as a major importer, blender, wholesaler, and exporter of the finest teas and speciality coffees. Petr Zelík, the CEO of the company, states that the firm is set to expand its network of retail shops and franchise outlets, in addition to furthering exports including the Master Franchise concept.

What is the history of the company?

Shortly after founding the firm, which was in 1993, we opened a tearoom in Sadová Street in Zlín. However, my fervour to work with loose tea and share this with people was beset with hurdles. Only a few individuals knew what loose tea was and were willing to buy and drink it. What was later to become tea culture was merely at its start.

The more praise the project received, the less well it did financially.

The breakthrough came, as often in life, via an unexpected occurrence that got the ball rolling. At the end of 1995, a new shopping centre was opened in Prague-Vinohrady Pavilion. It dawned on me that people might just, whilst doing their general shopping, get the impulse to purchase loose leaf tea. I made enquiries about renting an area close to the busy supermarket. The shop was fitted out with glass jars, so people could lift the lids and smell the fragrance of the teas, whilst the transparent glass would let them visually assess their quality. At last! Some degree of success was mine.

A true turning point came in 1997. While the Vinohrady centre was relatively small, the one called Černý most was designed to become a large-scale shopping centre with a hypermarket. Here, too, it was possible to find a space for rent. The residents of Prague took a liking to this shopping centre, and for the first time crowds of people ended up passing by the store. This had the effect of putting the company on the right course.

We began exporting goods in 2001, and today we export to more than 28 countries, and the number is still growing. A boost came | 12

in 2002 with the opening of our headquarters in Slušovice. In 2009, a fully automated packaging line was purchased. Two years later we bought a modern coffee roaster and began to roast beans in-house. In the same year, we joined the Czech Franchising Association, and commenced franchising activities.

In the autumn of 2016, we opened a distribution warehouse (in Tečovice, near Zlín). All in all, our commercial and business premises now cover a surface area of 6 000 sq. metres.

It would seem that you’re at the forefront of the sector in the Czech Republic, in part due to the sheer variety of tea you sell.

What might the secret of your success be?

I believe we’ve fully mastered the processing techniques necessary for tea and coffee. Every product is imported directly from the country of origin. Furthermore, we have our own laboratory and develop original tea blends, which constitute the company’s know-how. When developing them, we blend with a combination of specific aromas and components that have come to represent an exclusive “signature”, which is hard to imitate.

Your firm has also entered into foreign markets. What’s been the progress of export over the years, and what plans are in place for the future?

At the outset, we did not even think of such a possibility, but advances were made at the end of the 1990s, by which time we had mastered all the necessary production processes and made inroads into the neighbouring market of Slovakia. Soon afterwards, we expanded into Poland, Hungary and some countries of the former Soviet Union. Exports went up in 2005 due to the original accessories we had introduced.

The territory accounting for the greatest proportion of exports is Poland, a nation which still has tremendous import potential. Other significant countries are Romania, the UK, Bulgaria, Russia, and Ukraine. I mustn’t overlook West European countries such as Italy, France, Ireland, Spain, and Portugal, and we’ve supplied Nordic countries, too, especially Finland and Sweden. We also export to Serbia and the Baltic States, and even further afield – India, Chile, Singapore, and Malaysia. Obviously, we do not send the same teas to Asia that we buy from there. Instead, we dispatch teas sourced from other parts of the world, in addition to our flavoured teas and fruit and herbal blends;

those to which we have added value. Our products are enthusiastically promoted by fellow Czechs living abroad, and we participate in international trade fairs. We’re also active on social networks.

Oxalis’ exports have been steadily rising. In fact, between 2008 and 2016 the amount exported more than doubled in volume.

Exports currently account for around 20 % of the turnover, and our aim is to keep on push ing that figure higher. In 2017, tea comprised the most exported item – 70 % (158 tonnes), while coffee accounted for 15 % (26 tonnes).

How is the company set for the future?

In 2017, the firm, with its 130 employees, showed a turnover that exceeded the CZK 250 million mark for the first time ever. Tea was responsible for the greatest share of this amount, approximately 60 %, followed by coffee at 20 %, whereas accessories and gift packs totalled 20 %. For the near future, we have set ourselves several new strategic targets to further consolidate Oxalis’ position.

We shall open more shops and advance our franchising activities. This should lead to greater concentration of turnover in the firm´s main line of business. One aim is to make it a strongly export-oriented company, and the “Master Franchise Manual” is crucial in this, since it is a prerequisite for utilising the franchising system in trade abroad. At the same time, we would like to alter our e-shop to open it up to selected EU countries.

What’s more, in November 2018, we entered into a brand-new segment. A series of cosmetic products with green tea and green coffee bearing the name ASTRAIA shall be available exclusively from our retail stores.

We believe it will seamlessly combine with our core product range.

Can you perceive any strong trend that is currently influencing your line of business?

Yes. For example, green tea has been recognised as a key superfood this year. It is also popular with our customers. Its marketability has been growing year-on-year and exceeds that of black teas. The greatest upturn in sales was registered for green teas from Japan. Indeed, a very popular tea today is Matcha. This can be prepared hot or cold, in the form of an iced drink, cocktail or smoothie, and is an ingredient in cooking and baking. This corresponds with the trend currently dominating the tea world.

CZECH BUSINESS AND TRADE

13 |

WINE

Czechs´ Affection for Wine Is Growing This annual wine harvest may be very surprising as vintners have never before experienced similar harvest conditions as this year and, in addition, the quality and quantity may have been influenced by the weather during wine ripening and now by the autumn harvest.

n IT´S TOO SOON TO ESTIMATE

THE QUALITY

This year´s hot, dry summer has caused a shortage of water in the vineyards, which in turn has affected the condition of the plants. In dry places in particular, the grapes are wilted and in some places the grape berries are small. Much will depend on rain before the beginning of the harvest, Svoboda says and describes the differences in the maturing of white and red wine berries: “The favourable conditions of the warm summer will certainly have a positive effect especially on the blue varieties. In this country, white varieties ripen at a time when the nights are already cold and the days are still warm. This lends Moravian wines their special character. This year, however, it will be different, at least as regards the earlier-ripening varieties. So that the situation is rather uncertain and it is therefore too soon to estimate the quality.”

n INVESTMENT IN PRODUCTION While in 1989 Czechs consumed about 11 litres of liquid grapevine per head annually, in 2016 the consumption was nearly 20 litres, and the Czechs´ affection for wine | 14

is steadily growing. The Czech Republic is only 30 per cent self-sufficient in wine production, so that the rest must be imported.

Domestic producers have therefore started a huge wave of investment in production.

This year, the construction of the largest vine-processing plant in the Czech Republic started in Mikulov. When completed, its capacity will be 8 million kilograms of grapes (with the possibility of raising its capacity to 12 million) and the Mikulov compound will become the largest and most up-to-date vine-processing plant in this country. Its huge hall is planned to be completed within two years. Its storage capacity will be 100 tanks, with several receiving bathtubs, pneumatic presses and heat exchangers for cooling mash and cider. Last year, Bohemia Sekt, the leading Czech producer of sparkling wines, realised revenue of CZK 1.6 billion, the same as in 2016 and 2015. Bohemia Sekt, known for its popular sparkling wine of the same name, also produces different brands of spirits and wines, such Habán Cellars, Mikulov Wine and Chateau Bzenec.

Its revenue began to grow significantly in 2014, when the company earned CZK 1.4 billion. Volařík, another viticulture company in the region, has completed a new production plant worth CZK 30 million. The plant is situated in an attractive environment with a view of Mikulov Castle, which the company would also like to use for tourist purposes. Large sums have been invested in new manufacturing facilities in the region by other viticulture companies, such as Chateau Valtice, Vinařství Mikrosvín Mikulov and Fučík. In 2018, the Volařík company won the

“ČR Vintner of the Year” award, organised by the Czech Wine Archives in collaboration with the Czech Vintners´ Association and the Czech Sommelier Association.

n WINE TOURISM The interest in wine tourism is growing hand in hand with the booming popularity of wine-drinking, especially among foreign visitors coming to the Czech Republic. The wide range of grape varieties grown here, the large number of vintners and the variability of the wine vintages and types of wines produced in the Czech Republic provide wide scope for wine lovers in search of a special experience. A popular undertaking is visiting the Wine Salon of the Czech Republic in Valtice. There, in the cellars of Valtice Castle, visitors have an opportunity to taste a selection of 100 of the best wines, representing different vine-growing sub-regions. Another possibility is visiting some of the large number of wine-tasting events. Most of them are accompanied by local folklore productions with dulcimer band music. Special occasions are Open Cellar Days held during the summer season, where visitors can taste and buy local wines.

Local wines are also offered by community wine shops and various wine galleries presenting vintners from the particular locality.

In autumn, visitors have an opportunity to taste the local “Burčák” – semi-fermented grape must – a drink practically unknown elsewhere in the world. Burčák drinking is linked with vintage festivals, some of which have a historical character, accompanied by rich cultural programmes (Znojmo, Mi-

Photo: CzechTourism archives, Petr Lavik

At present, vintners are seeing this year´s harvest as very good. “We have already started the harvest, but I am not in a position to value either the quantity or the quality. The number of grapes in the vineyards point to a good harvest. But the decisive factor will be their weight,” said Josef Svoboda, vineyard manager of the BOHEMIA SEKT group, in August 2018.

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WINE

kulov). Another Czech vintner speciality is St. Martin´s wine – young wine placed on the market on St. Martin´s Day, 11th November, and often served with roast goose, sauerkraut and dumplings. Wine is the topic of various vineyard hiking trails leading through the vineyards, and trails devoted to certain wine varieties. Special events are Moravian cellar tours, often accompanied by mobile applications. Visitors also have an opportunity to observe the attractions of the local wine-growing countryside from above – from some of a number of the recently-built lookout towers, one of which has the form of a wine glass. If you are more profoundly interested in the history of viticulture, don´t miss the interactive exposition on viniculture in this and other countries in Mikulov Castle. And don´t forget to taste the local varieties, for example, Pálava, Moravian Muscat, André, and Cabernet Moravia.

n MOST WINE IS IMPORTED

FROM HUNGARY

The Czech Republic imports more wine than it exports. Last year, the unfavourable trade balance exceeded the 4 billion Czech crown mark, for the first time since 2008, as shown by the statistics of the Czech Vintners´ Association. Last year, Czech vintners exported wine worth an equivalent of CZK 434 million in comparison with CZK 4.75 Main wine suppliers (first half of 2018) Hungary

190 008

19.00

Italy

86 438

37.40

Slovakia

76 702

18.00

Spain

74 194

25.80

Moldova

47 132

27.80

Germany

35 271

48.70

France

33 429

94.80

Chile

14 125

70.00

South Africa

13 233

30.70

8 010

44.30

Australia

Source: Czech Statistical Office, Country Quantity (hl)/ Average unit value (CZK/l)/

billion worth of wine imported by Czech businessmen and vintners. Czech wine production has been fluctuating significantly since the Czech Republic joined the EU in | 16

2004 and the development is hard to predict according to the harvest. This affects the total wine supply in the market. The Czech Republic imports most wine from Hungary and Italy, followed by France and Spain. Among the non-EU countries, the Czech Republic imports wine from Moldova, Chile, and the Republic of South Africa.

Czech vintners export their wine in particular to Slovakia and Poland.

n LARGEST PLAYERS

IN THE MARKET

The largest wine producer in the Czech Republic last year was the Bohemia Sekt Group Largest domestic wine producers in 2016 (producers and sales output) Producer

Output

Bohemia Sekt

172 076 hl

The largest wine grower is Vinofrukt, which works 1850 hectares of farmland, 530 hectares of which are vineyards in the Mikulov wine sub-region with the best grape- growing soil. Vinofrukt is also an important domestic producer of vine seedlings of all the recognised table wine vine varieties, with an annual output of 800 000 plants. It also mediates the import of vine seedlings from foreign countries, especially Austria, Germany, France, and Italy. The vintners placed next are Mikrosvín Mikulov and Neoklas. The latter wine grower farms 345 hectares of vineyards and processes Largest vintners Vinofrukt

514,6 ha

Vinařství Mikrosvín Mikulov

470.8 ha

Bulk Wine Trade

50 587 hl

Vinařství Neoklas Šardice

342.7 ha

Vinařství Velké Bílovice

46 905 hl

Vinice Lahofer

309.4 ha

Bronislav Vajbar

44 188 hl

Vinice - Hnánice

279.0 ha

Royal Wine

41 414 hl

Vinice Hustopeče

261.0 ha

Zámecké vinařství Bzenec

40 927 hl

Stanislav Holec

229.3 ha

LP Wine

40 061 hl

Zemědělská a.s. Čejkovice

227.4 ha

Znovín Znojmo

27 782 hl

Vinné sklepy Lechovice

223.1 ha

Pastra

26 224 hl

Château Bzenec

194.2 ha

Château Valtice - Vinné sklepy Valtice

26 007 hl

with an output of nearly 172 076 hectolitres of wine, slightly less than in 2015, according to the statistics of the Central Agricultural Control and Testing Institute.

Statistics The average price charged by industrial bottled white table wine producers in June 2018 was CZK 40 per litre. As regards red wine, the average price was fixed at the level of CZK 38.80 per litre. In comparison with the previous period, the white wine quotation strengthened slightly, while the red wine quotation weakened.

The average price of white quality bottled wine reached the level of CZK 59.90 per litre. The price of red quality bottled wine this time closed at CZK 60.40 per litre. In the first half of 2018, the Czech Republic

its entire output in its own modern plant in Šardice, South Moravia, with a capacity of 3 million litres of wine. In 2015, it came into the ownership of the FPD Group, which also owns the Mutěnice Vinařství wine-making company.

imported 674 452 hl of wine at the average unit price of CZK 32.40/k.

White wines accounted for 50.1 % of total wine imports and red wines for 25.2 %. The wine was imported mainly in two-litre bottles (57.54 % equivalent to 352 843 hl at the average price of CZK 18.10/l). In the first half of the year, the Czech Republic exported 23 995 hl of wine at the average unit price of 62.70 CZK/l. White wine accounted for 30.6 % of total exports and red wines for 38.2 %.

CZECH BUSINESS AND TRADE

Templar Wine Cellars Čejkovice If you love wine and traditions...

The history of the winery Templar Wine Cellars Čejkovice is connected to the arrival of the mysterious Templar Knights Order in Čejkovice in 1248. Together with planting vineyards, the Templars built extensive wine cellars, in which the company still operates today. In 1936, a wine cooperative was established in Čejkovice, followed by Čejkovice Templar Cellars (Templářské sklepy Čejkovice) since 1992. The cooperative currently comprises 360 grape growers.

Our vineyards are located in three Moravian wine-growing areas. The area of vineyards cultivated by our grape suppliers is approximately 1,500 hectares. Thanks to the varied subsoils, different locations and weather conditions, the customer gets a wide portfolio of top-quality wines that are regularly awarded medals at both national and international competitions.

The company operates in the historical cellars where more than 350 000 litres of wine in oak and barrique barrels are stored; the extensive bottle ripe wine archive is very attractive as well. Sparkling wines mature naturally in the cellars, too, their quality ranking them among the best in the Czech Republic, with a number of awards won.

There is an additional capacity of 6 000 000 litres in the technological buildings in Čejkovice, where a modern bottling line with a capacity of up to 2 000 bottles per hour is located.

We offer a wide portfolio of quality wines to our customers – quality varietal wines, barrique, attributive, archive, ice, and straw wines.

2018 2017 2016

For more information about the cooperative and the wines, visit www.templarske-sklepy.cz/en/.

17 | Templářské sklepy Čejkovice, vinařské družstvo / 696 15 Čejkovice 945 / tel.: +420 518 309 011 / e-mail: info@templarske-sklepy.cz

WINE

Czech Wines in Figures

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The Litoměřice wine-growing sub-region is situated in the northern part of Bohemia, in the Most, Litoměřice, and Ústí nad Labem Districts. Most of the vineyards are to be found in the Central Bohemian Uplands, where the subsoil is formed by basalt and limestone. The dominant varieties grown there are Müller Thurgau, Rhine Riesling, Ruland Grey, and Ruland White. The most widely grown blue varieties are St. Lawrence Blue, Ruland Blue, and Blue Portugal.

The Mělník wine-growing sub-region lies in the Central Bohemia Region. The most widely grown white varieties there are also Müller Thurgau, Rhine Riesling, Ruland Grey, and Ruland White. Blue varieties, also mainly St. Lawrence, Ruland Blue, and Blue Portugal, are grown on 38 % of vineyards.

The Znojmo wine-growing sub-region is to be found in Znojmo District. The Znojmo sub-region, lying in the rain shadow of the Bohemia-Moravia Highlands, has stony soils most suitable for the cultivation of white wines. The most widely grown white must varieties are Green Veltlin, Müller Thurgau, Rhine Riesling, and Sauvignon. Among blue varieties, the dominant wines are St. Lawrence, Frankovka, and Zweigeltrebe.

The Mikulov wine-growing sub-region is situated within Břeclav District. The local soils contain a high percentage of limestone and are suitable for growing Chardonnay, Welsh Riesling, Ruland White, Pálava, and Tramin Red. Blue varieties are grown on 27 % of the vineyard surface area, the most frequent varieties being St. Lawrence, Frankovka, and Zweigeltrebe.

The Velké Pavlovice wine-growing sub-region lies in the South Moravia Region, which provides very favourable conditions for the cultivation of blue varieties, typical of the Region. White varieties are grown on 58 % of the vineyard surface area. The most frequent varieties are Green Veltlin, Müller Thurgau, Welsh Riesling, and Ruland Grey, and among the blue varieties, the most frequent are St. Lawrence, Frankovka, and Blue Portugal.

The Slovácko wine-growing sub-region is situated in the South Moravia and the Zlín Regions. This sub-region offers more favourable conditions for the production of quality white wines. The most widely grown varieties are Müller Thurgau, Rhine Riesling, Green Veltlin, and Ruland White; as for the blue varieties, the prevailing wines are Frankovka, St. Lawrence, and Zweigeltrebe.

Photo: Czech Vinters΄ Union archives

The Czech Republic has two winegrowing regions – Moravia and Bohemia – which are divided into six sub-regions. These comprise 384 wine-growing communities cultivating 17 678 hectares of land with 1 278 vineyards and some 18 000 vintners. Most of the vineyards, about 96 % of them, are to be found in Moravia, the remaining 4 % are situated in Bohemia. Sixty-nine per cent of the total vineyard area is planted with white varieties. There are around 850 registered vintners, ranging from large firms down to small family units and thousands of small private vintners. The Moravia wine-growing region (with 312 wine-growing communities and 17 034 hectares of vineyards) has four subregions: Znojmo (90 communities, 3 102 ha, 1 142 wine growers), Velké Pavlovice (75 communities, 4 811 ha, 6 881 wine growers), Mikulov (30 communities, 4 791 ha, 1 142 wine growers) and Slovácko (117 communities, 4 320 ha, 8 198 wine growers). The Bohemia wine-growing region (72 wine-growing communities and 643 ha of vineyards) consists of the Mělník sub-region (42 communities, 331 ha, 92 wine growers) and the Litoměřice subregion (30 communities, 302 ha of vineyards, 49 wine growers).

CZECH BUSINESS AND TRADE

Czech Wines and Sparkling Wines Have a Well Deserved Place in the World Market In Bohemia, viniculture has a history of more than 1 000 years and in Moravia its history goes back nearly two millennia. “Although the area of our vineyards is not large in comparison with vine-growing regions in other countries, the variety of wine flavours is very wide. The reason is the specific climatic conditions and subsoils in the Czech Lands,” says Ondřej Beránek, President of the Czech Vintners´ Union.

The production potential of vineyards in the Czech Republic is 19 633.45 ha, while the actual cultivated surface area is 17 198.05 ha. The remaining surfaces are grubbed vineyards with the right of replanting. What then is our position in comparison with the EU as a whole?

I think that there is no sense in comparing the Czech Republic with other EU member states, as we are not a typical grape-growing country such as Italy, Spain, or France. The surface area of our vineyards is about the size of just a single vine-growing region in those countries.

On the other hand, our wines are very popular, especially with domestic consumers, who prefer them to wines from Western Europe and the wine-making superpowers. Foreign consumers would undoubtedly also like our wines, as is shown by the high ratings of our wines in international competitions. Regrettably, our country is too small to have much larger vine-growing surfaces and consequently produce enough wine for foreign consumers. The problem is not vine-growing regulations, but a lack of land suitable for planting vines and a shortage of people to cultivate the vineyards.

In 2017, Czech vintners harvested grapes corresponding to 600 000

preciate their lightness and good drinking properties, which is a rare feature of southern red wines. Worth mentioning are red wines from Velké Bílovice wine-growing community. These are naturally not the only wines deserving mention.

hectolitres of wine. What will this year´s harvest be like?

At the moment, it is too soon to estimate this year´s harvest. So far, however, this year seems to be an above-average one in terms of volume. As regards the quality, we´ll have to wait a little.

Wine production in the Czech Republic is dominated by white wines (Müller Thurgau, Veltlíner Green, Welsh Riesling varieties), because the alternation of cold nights and warm days during harvesting leads to the creation of very interesting aromatic substances in those wines. Can you mention the most important wine-growing regions in the Czech Republic?

There are two wine-growing regions in the Czech Republic: Moravia and Bohemia, which fall into six sub-regions. Although the surface area of our vineyards is relatively small in comparison with foreign regions, the array of the wine flavours is surprisingly wide, mainly due to the specific climatic conditions and subsoils in the regions. For example, the Mikulov vineyards produce perhaps the best Welsh Riesling, while the Bzenec area is known for its unique Rhine Riesling. Aromatic red wines, such as Tramín, Pálava, and Moravian Muscat, are also doing well and are frequently praised by foreign sommeliers. They especially ap-

Czech wine exports have been growing in recent years. Which countries are the largest outlets?

Although wine export is growing, it must be pointed out that the size of this export is limited by the country´s production potential. Wine growers lack the motivation to export – all wines produced in the Czech Republic are easily sold at home. As regards wine export, most of the wines are exported to neighbouring Slovakia.

In the past few years, however, growing interest in importing Czech and Moravian wines has been shown by China. The potential of the Chinese market is tempting for many vintners worldwide, as wine has become increasingly popular in China in recent years.

Our wine producers are also scoring high in foreign competitions. Can you mention some of the latest achievements of Czech vine growers?

For example, at the Concours Mondial de Bruxelles international travelling wine competition, this year hosted

by Beijing, our vintners were very successful in the competition of more than 9 000 wines from all over the world. They succeeded with 35 wines, 13 of which won a Gold Medal and 22 gained Silver...

There is a countless number of foreign competitions where at least one Czech wine has won a medal, which is very pleasing for us. This year, for example, our wine producers scored great success at Vinalies Internationales in Paris, when they carried away 16 Gold and 22 Silver Medals. Also worth mentioning are the International Wine Challenge in London and contests focusing on just one wine style. Our wines have won awards, for example, at the Mondial du Rosé world championship in Cannes and the Champagne and Sparkling Wine World Championships.

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WINE

A new Wine Law Amendment was passed by the Czech Parliament in 2017, after a long legislative process.

The Amendment is expected to restrict wine watering, for example.

It regulates the form of wine import into the Czech Republic, stipulates the required form of selling wine in barrels, i.e. vessels with a volume of more than 20 litres, and provides for the registration of such sales. Does the Amendment meet the ideas of the Czech Vintners´ Union?

The just approved Wine Law Amendment was debated for several months and has undergone numerous changes. I think that the final version is a good compromise for all the parties concerned – wine growers, importers and wine vendors, as well as the control authorities. Nevertheless, a comprehensive evaluation of the efficiency of this Amendment will need more time.

The wine tourism phenomenon has also reached the Czech Republic, and has become increasingly popular over the past few years. Which regions are pursuing this activity and what is especially worth coming to the Czech | 20

What opportunities and threats await winemaking?

In my opinion, a great opportunity for Moravian wines is their continuously improving quality. As mentioned before, the ratings at foreign competitions speak for themselves – Moravian Wines have a great potential for international recognition and fame. Another potential, which, however, may also be a threat, is climate change. In recent years, it has been proved that the local climate has been warming on the long-term basis and the grapes are well ripened at harvest time. As regards the threats, the greatest menace is the weather threatening the vineyards, either by drought or long-lasting heavy rain. In addition, wine growing, just as all other sectors in the Czech Republic, is afflicted by a labour shortage. If this trend continues, it could happen that, in a few years, we may reach the critical point where we´ll have splendid vineyards and the most up-todate technical equipment, but there will not be enough people to cultivate them.

Can you perceive any strong trend affecting viniculture in the Czech Republic?

The absolute majority of our wines are sold where they have been produced, i.e. in the Czech Republic. And the trends in wine growing are most influenced by people’s taste preferences. I must say that, concerning wine, Czechs are very conservative and come to accept innovations and new trends fairly slowly. But one trend which I have noticed recently is the growing preference for rosé and sparkling wines, whose consumption is steadily increasing.

However, perhaps the most positive trend in wine making can be observed on the part of the wine growers themselves.

They are beginning to invest in marketing, take better care of their clients, create associations, and try to invest in domestic viniculture and its reputation. And this is a factor that has the greatest potential for our sector.

Photo: Bohemia sekt archives, pixabay.com

As can be seen, our wines and sparkling wines occupy a well deserved place in the world market, increasingly winning the hearts of international sommeliers.

This supports the claim that Moravian and Czech wine producers are doing their work well.

Republic for, in enjoyment of this new activity?

Spending a holiday in South Moravia is the dream of all wine lovers. Wine tourism reveals how wine growers maintain contact and support each other. Instead of rivalry and competitive in-fighting, the prevailing spirit is mutual collaboration and assistance. This is shown, for example, by the large number of local vintners´ associations and cooperating communities working together to prepare unique entertainment for Czech and foreign tourists.

The opening of wine cellars in different communities is worth mentioning, where special programmes and of course the tasting of the best local wines are arranged for visitors. The tradition was initiated by Velké Bílovice, where the “From Wine Cellar to Wine Cellar” event attracts tens of thousands of visitors each year. Grape harvest festivals are also popular, held at the end of August or in the course of September, at the time when harvesting is in full swing.

However, visitors will find entertainment not only during special events. There is a dense network of cycle paths in South Moravia, which lead along the vineyards, with many wine cellars open all the year round, inviting visitors to inspect their production facilities. There is a large number of other events available to visitors. Wine tourism is linked with yet other services, such as top-standard gastronomy and authentic accommodation in the vineyards.

CZECH BUSINESS AND TRADE The Skoupil Family Winery was founded in 1992 by its current owner, Petr Skoupil, winemaker and grape grower in one person. The winery is known for the quality of its wines. We are regular winners in competitions and at wine exhibitions at home and abroad. The recognitions we value most are our victories and awards in the Winemaker of the Year Competition in 2008, the Silver Winemaker of the Year 2010 competition, the Absolute Champion Prague Wine Trophy 2013, the Vinum Juvenale 2012 Champion, four fold Best of Nation in San Francisco and the ranking of our Red Tramin among the world´s 1000 best wines according to the Vinalies Paris competition.

Together with Design Studio Pergamen we won the Reddot Design Award for our new Terroir label. At the label change we divided our wines into four sections – Ceramics, Terroir, Reserve and Limited.

Our wines owe their high quality to tradition based on respect to nature and the soil combined with modern processes. We treat the grapes with utmost care using the unique grape berry sorting method. The result is variety pure and extremely interesting attributive wines. Their typical features are the wide range of primary aromatic substances and especially their strong fruit character with minimum bitters content.

The winery operates an e-shop, www. skoupil.com, where you can purchase the full range of the Skoupil winery wines, gifts, vouchers, etc..

WWW.SKOUPIL.COM ESHOP WITH UNIQUE WINES

RODINNÉ VINAŘSTVÍ SKOUPIL, SADOVÁ 1399, 691 02 VELKÉ BÍLOVICE, +420 776 700 783., INFO@SKOUPIL.COM

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ORGANIC FOOD

Organic Food Is Gaining in Popularity

The number of organic food producers has increased to 712 in the course of this year. Most often these producers are concerned with meat, fruit and vegetable processing and dairy produce production. What, in your opinion, is the current state of the Czech organic food market?

I am certain that at last our market is growing at about the same rate as the markets in Germany and France. Although we do | 22

specifically Germany. In my opinion, however, the export of organic foods will rather decrease, which is obviously good for the organic food market. At the same time, I am all the more confident that domestic organic food consumption will increase.

not have actual figures, because our statistics process the data one year back (so that at the moment we have year-on-year comparisons for the years 2015/2016), I see from actual observations that the figures are rapidly increasing. In addition, I hope that the activities we are currently pursuing and which include, for example, efforts to cut down VAT on organic food, inclusion of organic foods in public catering services and organic food promotion, will massively spur on the process.

The total organic food trade turnover of Czech firms, too, is growing each year.

And so are Czech organic food exports.

The average annual consumption of these foods has increased to a level worth CZK 250 per head of the population. In terms of long-time development, this means a most significant and most distinctive growth of the market. Do you think that this trend will continue? To which countries do we export the most?

I am persuaded that organic food consumption will be growing, unless some devastating financial crisis occurs to slow down this development. Czechs like travelling and they already have relatively enough money to spend, so that what is actually needed is to persuade them that ORGANICS are a must on the dining table and that buying organic food is not a waste of money. On the contrary, organic food is good for the economic management of water, soil, and the landscape.

Naturally, we export most to EU countries,

Ecological farming covers the rearing of 17 % of cattle (in the category of cattle excluding market milk production, however, it covers more than 50 % of animals), 46 % of sheep, 35 % of goats and 22 % of horses. The surface area of ecologically farmed soil is growing on a long-term basis. In 2017, this area accounted for 12.37 % of the total surface area of agricultural land. The Czech Republic is among the world´s 20 countries with the largest surface area of land cultivated by environmentally friendly methods. These are good figures. How do you explain this fact?

It is mainly due to the structure of Czech ecological farming. Most of the land worked by this system is pastureland. And animals live on it. You would hardly grow wheat or maize in the mountains and foothills. That is why people began to develop ecological farming there, and this has not changed. Because of the large extent of mountainous areas, we also have a high percentage of land cultivated by the ecological farming system. Currently, this system is also spreading to cover orchards and arable land, which is very gratifying.

This is confirmation of my claim that ecological farming is really increasing.

What risks and opportunities can you see in the Czech Republic as regards ecological farming?

A risk for the sector is political will and the large agricultural players. Personally, I think that most of the Czech agricultural and food processing undertakings are owned by not more than 15 mutually interrelated entities. And as regards ecological farming, this is certainly not much to their liking. On the contrary, I see the opportunity in “small-scale” food processing, private slaughterhouses, bakeries and other smaller, often local businesses. Practical ecology has its place in the regions.

Czech eco-food manufacturers participate in a number of trade fairs, for example the BIOFACH organic food fair

Photo: PRO-BIO Association archives

Food with the “Bio” label is becoming increasingly popular in the Czech Republic and the organic food market is steadily growing. Currently, organics account for less than one per cent of the total amount of consumed food. ”I have no doubt that the consumption of organic food will grow. This trend is certain to continue, unless some devastating financial crisis occurs to slow the process down.

Czechs are travelling a lot and they already have relatively enough money to spend, so that what is actually needed is to persuade them that ORGANICS are a must on the dining table and that buying organic food is not a waste of money,” says Kateřina Urbánková, Manager of the PRO-BIO Association of Environmentally Minded Farmers.

CZECH BUSINESS AND TRADE

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CZECH BUSINESS AND TRADE

in Nuremberg. This year, a record 33 Czech companies displayed their products there. Can you give us some details?

Biofach is a fair held each year, which has no parallel in the world in terms of its size.

All those who want to be successful in the eco-sector must be present at Biofach.

This especially concerns those having ambitions to export and develop their business. Czech manufacturers know this and therefore their interest in being present at the fair is growing each year. In addition, the state financially supports the participation of Czech farmers in Biofach in the form of the installation of an exposition there. The number of exhibitors displaying their products at Biofach is growing, with the increasing number of Czech eco-food processors in the sector.

Which of our eco-foods have a chance of success abroad in the 21st century, or more precisely: which of the Czech-made ecobrands have made a mark in the world?

As far as I know, the most popular products are spices, teas and raw eco-products, i.e. commodities which customers do not expect to be made from products which can be grown or manufactured in their own country. It is not to be expected that the German customer will be buying eco-butter from the Czech Republic, if he can get eco-butter of German origin, ideally coming from his own region. As regards raw chocolate, this is different.

Do Czech eco-farmers collaborate with the research sphere, and if so, on what basis?

They are trying to. Our PRO-BIO Association bringing together eco-farmers, for example, is a member of the Eco-agriculture Technological Platform, which associates the academic and production sections of eco-agriculture. In the framework of this platform, we discuss with our colleagues in research institutes and universities the issues worrying farmers in practice and what problems would need scientific advice. This of course is a longterm process.

In 2015 the Government approved the eco-farming development plan for the period until 2020. The plan is that, by the end of 2020, eco-foods should account for 3 % of the total food and beverage

The International BIOFACH Organic Food Fair and the VIVANESS Fair for Natural and Organic Personal Care in 2018 The Czech Republic was strongly represented at the Fair held in Nuremberg in February 2018, which was the 99th annual event. The Czech Republic participated in it for the eleventh time and was presented there at a stand of Czech firms under the aegis of the Czech Ministry of Agriculture. This year, a record number of 33 Czech companies were present at the Fair.

The exhibitors at Biofach included seven members of the PRO-BIO Association of Eco-farmers. Czech Ghee – production of clarified butter, with or without flavour; Ghitely – nougat goodies; Extrudo Bečice – production of original crispbreads and instant semi-finished and kosher products; HOPI POPI – popcorn production; Javorník-CZ – Eco-farm which, in addition to crop and animal production, specialises in its own eco-milk production in a small dairy and also has its own bakery and grower distillery and is planning to build its own meat cutting plant; Kutná Hora Wine Cellars – holder of Eco-certificate and is the only vinery in the Czech Republic to hold the prestigious DEMETER Eco-dynamic Farmer certificate; COUNTRY LIFE – the largest eco-food wholesaler with its own farm, bakery and shops, and SUNFOOD, manufacturer of cooled rational foods. Other firms presented at the Czech stand were Amylon with eco- puddings, eco-dumplings, pancake and pizza mixtures and superfoods – purée with chia seeds, eco-baking powders, eco-vanilla sugar; Cereabar – cereal bar manufacture; COOC Food-Koláčkova pekárna bakery – rye bread, cakes, crackers; Coolcoco – young coconut and products thereof; EKOFRUKT Slaný – growing

consumption. Do you think it is an ambitious plan? Is the proportion of land increasing on which the eco-farming method is used? The current surface area on which this type of farming is applied in the Czech Republic is approximately 500 000 hectares, i.e. roughly 12 % of agricultural land.

In my opinion, this target is unrealistic and would need at least 10 years to be met.

own fruit trees and making eco-quality Twiggy müsli bars and dried fruit; FRUJO – ready-to-cook foods; Hempoint – hemp products; Horňácká Farma farm – wide range of eco-products containing meat, vegetable products, and processed vegetables and fruit; Markol Food – modern preparation of raw, vegan and eco-bars, balls, wholemeal breakfast cereals; SOLEX AGRO – supplies berries, nuts, mushrooms and grains; PRO-BIO Eco-farmers´ Association – organisation representing the interests of eco-farmers, food processing plants and eco-food dealers.

Other Czech firms rented their own exhibition space: Čajová květina s.r.o., COUNTRY LIFE s.r.o., ED & F Man Ingredients s.r.o., SUNFOOD s.r.o. and Zelená Země s.r.o.

Refreshments served during business talks at the national stand were supplied

by Czech eco-producers. They included a wide range of foods, ranging from dairy produce from Amalhen farm and Javorník-CZ, meat products from Biofarma Sasov, to sweet and savoury biscuits from Zemanka eco-bakery. Pickled squash were also served from Bio Verich, which won the 2017 Czech Eco-food Award, and Černíkovice gherkins and ram horns from Kurka (winners in the Czech Eco-Food competition in previous years). There were also eco-wines from the Kadubcova family winery. For visitors to the Czech national exposition who preferred meat products, the organisers prepared Sasov eco-sausages, shuffle spreads, eco-brawn and boar eco-sausages.

All the above-mentioned products originate from the Vysočina highlands, where they are produced by the Sasov eco-farm located near Jihlava.

The eco-farming action plan has many ambitions, which at the moment seem unrealistic. We lack the political environment and the willingness of the state to publicly declare that eco-farming is the right way to be followed. On the other hand, there are many things which have been initiated, so that there is some progress. But the targets set in 2015 will definitely not be met.

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ORGANIC FOOD

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CZECH BUSINESS AND TRADE

PR AKINU

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Czech Bio-food in 2018 The 2018 Czech Eco-food Competition organised by the PRO-BIO Association of Eco-farmers, which was held for the 17th time this year, has already announced its winners. One of the best Czech eco-farming products is the eco-beef steak prepared by the Mitrovský dvůr farm, which was awarded the main prize in the competition. Another prize-winning product was the eco-friendly straw wine from Víno Marcinčák. Altogether 104 products from all over the Czech Republic were entered in the competition, 43 of which were ecowines. The main prize of the competition and at the same time the main prize in

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the eco-steak meats category was awarded to the Eco-beef tenderloin steak from Mitrovský dvůr, a.s. farm. “The steak from Mitrovský dvůr farm appealed to the jury with its crispness and ripeness. It was the incontestable winner in the steak meats category and the overall winner of the competition. I am very pleased about this.

Ripe beef produced by the eco-farming system has a great market potential now already and appeals to a large group of customers who know how to appreciate quality meat. In my opinion, anyone, even the inexperienced, will be able to prepare a real feast and create an amazing experience with such a quality steak on the

grill,” said Kateřina Urbánková, Manager of the PRO-BIO Association when reviewing the competition results. In other categories, the best placed products were: in the Vegetable Origin Eco-foods category, the winner was Apricots with Lavender and Honey – extra jam from Marmelády Šafránka s.r.o. In the Animal Origin Eco-foods category, the winner was ECO-fresh cheese with herbs from JAVORNÍK-CZ s.r.o. farm. The best food chosen in the Eco-foods for Gastronomy category was ECO Honey from Ing. Dušan Michálek. The winner in the Ecowine category was 2015 Rhine Riesling straw wine from Víno Marcinčák.

Photo: PRO-BIO Association archives

ORGANIC FOOD

CZECH BUSINESS AND TRADE

Bio-Food Exports Are Growing The bio-food market in Europe and in the world in general is experiencing a boom. The global bio-food market is worth more than EUR 80 billion, a 10 per cent increase year on year. In Europe as a whole, where a number of countries report a two-digit growth, its development is even more dynamic. Europe, with a turnover of EUR 33.5 billion, accounts for 40 % of the world bio-market, twice as much as ten years ago. Czechs rank alongside countries where the bio-food market is growing massively. In 2016, Czechs purchased biofoods worth CZK 2.55 billion and the price of the bio-foods consumed rose by 13.5 %. The bill each person paid for biofoods was CZK 241, CZK 28 more than the year before. People buy especially bio-quality milk and dairy produce, fruit and vegetables and juices made from them, as well as processed foods, such as spices, mustard, coffee, tea and ready-made foods, for example baby food.

Czechs buy nearly 44 % of the total bio-foods consumed in retail chain stores, 18 % in drug stores and 14 % in health food shops. Farm products and other directly sold goods have a 7 % share, the same as bio-foods sold by e-shops. When comparing the Czech Republic, Austria, and Slovakia, the prices of bio-yoghurts and biomilk are similar. As regards other products, bio-onions for example, these were 15 % more expensive in the Czech Republic than in Austria, but bio-millet grains were .28 % more expensive in Austria. Oat flakes, too, were more expensive there (34 % more), but in Slovakia they were 7 % cheaper than in the Czech Republic.

n THE TOTAL BIO-FOOD MARKET

IN THE CZECH REPUBLIC I n 2016, the total bio-food turnover of Czech firms, including exports, was approximately CZK 4.19 billion. Of this amount, total bio-food consumption (including imports) in the Czech Republic was CZK 2.5 billion (13.5 % more than in 2015), while bio-food export rose to approx. CZK 1.64 billion (of this amount, re-export was worth CZK 259 million, accounting for 16 % of total export).

A verage annual per capita consumption was CZK 241, with bio-foods accounting for 0.9 % of total food and beverage consumption.

I n retail trade, the share of the turnover derived from total bio-food consumption amounted to CZK 2 110 million. In public catering, the turnover increased to CZK 87 million year on year and the direct sales turnover (direct sale from eco-farms) to CZK 184 million, with sales carried out through e-shops amounting to CZK 172 million.

Bio-foods were sold in the Czech Republic in several different ways. The most bio-foods were purchased by Czech consumers in retail chains, i.e. in supermarkets and hypermarkets (43.9 %, i.e. for CZK 1.12 billion), followed by drug stores (17.9 %, i.e. CZK 456 million) and health food stores (14.3 %, i.e. CZK 366 million.

P roducts sold directly by farms and other producers were worth CZK 184 million (7.3 %), products sold by e-shops cost CZK 172 million (6.7 %).

A ltogether 603 bio-food producers (specifically 635 production units) were reg-

istered in the Czech Republic at the end of 2016, 11.3 % more than in 2015.

A total of 98 entities were newly registered in the Czech Republic in 2016, while 37 producers wound up their businesses.

T he most frequent objects of business of the producers in 2016 were in the categories “Production of other food products”, “Meat processing and preserving and meat product production” and “Processing and preserving fruit and vegetables”.

T he total turnover of bio-food producers in 2016 was CZK 2.786 billion, a 2.2 percent increase in comparison with CZK 2.727 billion in 2015.

T his amount of turnover, however, also includes the turnovers of companies which repack the purchased bio-products into consumer packing and the total turnovers of the “mix” entities, which distribute the products of other suppliers in addition to their own bio-foods.

I n terms of turnover, the largest volume of production in 2016 was again recorded by the category “Other food product manufacturing” (36 %, especially the “Spices and aromatic extracts” sub-category, followed by “Bakery, confectionery and other flour products” (15 %) and “Grain mill and starch products” (12 %), “Fruit and vegetables (12 %), and “Milk and dairy produce” (12 %).

C zech producers exported CZK 1 232 million worth of bio-foods. This shows that bio-food exports, going mainly to EU states, are growing. The largest volume of bio-foods (CZK 388 million) was exported to Germany and to countries not neighbouring on the Czech Republic (CZK 302 million) and to Austria (CZK 184 million). At the same time, 84 % of Czech bio-food producers sold most of their products on the domestic market, usually through retail chains (35 %), followed by wholesalers (15 %) and special shops selling health food and bio-food (13 %). Only 3 % of biofoods were sold through independent stores and nearly 9 % went for further processing. The proportion of other methods of distribution comprising direct sale, sale through the middleman, pharmacies or drug stores and restaurants accounted for 25 %.

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BREWING

Popularity of Czech Lager Is also Growing in Other Countries

Last year, less beer was brewed for the first time after a period of steady growth. What development do you expect this year?

Looking at this year´s January to August statistics, we can be optimistic seeing that the beer output has increased by 2 % year on year. The main trend is the continuing popularity of the lagers. On the other hand, the difference between the quantity of the beer consumed in Czech pubs and restaurants and that consumed at home once again increased at the expense of the latter. The Czech Beer and Malt Association | 30

that is its high drinkability, confirmed by a number of research studies. In brewing terminology, this signifies an important property, and that is that after having finished the first mug, you feel like having one more. Beer exports are increasing in all their forms and, as a result, the number of pubs in foreign countries serving Czechtype beer keeps growing. This trend is following two directions which often overlap.

The first is that domestic breweries are expanding with their brand pubs to foreign countries, often in the form of franchises or some other kind of collaboration with pub managers. The other trend which is spreading from the Czech Republic to other European countries, is tank beer. Restaurants with giant stainless tanks standing outside are a common sight in many countries.

estimates that, at the end of the year, the proportion may be 37 to 63 per cent in favour of packed beer consumption. At the end of last year, the proportion was 38 to 62 per cent. If the Czechs finally decide to drop in to the pub to enjoy a glass of draught beer, they usually order the traditional Czech lager, which includes 11- and 12-degree beers. The output of those beers rose by nearly 5 %. Ten-degree beers are mostly consumed to quench the thirst.

To which countries do we export the most?

The interest of brewers to export Czech beer is growing from year to year. From January to August this year, beer exports increased by 16 % year on year. We export to 26 EU countries. Our traditionally largest clients are our neighbours, i.e. Slovakia, Germany, and Poland. In addition, we export beer to another 68 states outside the EU. The largest importer among them is Russia, followed by the Republic of Korea, the USA, Serbia, and Canada.

Which Czech beers have the best chance of success abroad?

The popularity of Czech lager is growing not only at home, but also in other countries, where its consumption increased by 17 %, practically the most of all the beer categories. Czech lager of the Pilsner type has an exceptional property, which no other beer in the world can boast, and

You are Executive Director of the Czech Beer and Malt Association. Can you tell us what goals the Association has set itself for 2018/19?

Unequivocally its goal is to promote the positive perception and popularity of Czech beer, to inform the public about how the Czech brewing industry is contributing to the development of the Czech econ-

Martina Ferencová, Executive Director of the Czech Beer and Malt Association Martina Ferencová assumed her position as Executive Director of the Czech Beer and Malt Association at the beginning of 2017 and has been working for the Association for more than eight years. Martina Ferencová has been active in the brewing sector for 17 years, after completing her studies at the Economic Faculty of the Czech

University of Agriculture. She started her professional career in the Pivovary Staropramen brewery company, where she worked for 11 years in the Financial Department as Head of the Receivables and Investment section, and later as Head of the Secretariat and coordinator of responsibility projects of the Czech Beer and Malt Association. Since 2011, she has also been Chairwoman of the Commission for the Social Responsibility of Breweries.

Photo: Czech Beer and Malt Association archives

Czech breweries are currently experiencing a great season, as the foreign interest in Czech beer increases. “The economic importance of brewing exceeds the limits of the sector itself, expanding into areas such as agriculture, logistics, and water supply engineering, in addition to catering, the retail trade, and public administration.

Beer production also supports suppliers in the areas of all its inputs and is an important consumer of the products of Czech farmers,” says Martina Ferencová, Executive Director of the Czech Beer and Malt Association.

CZECH BUSINESS AND TRADE

omy and, last but not least, to promote the reputation of the sector as a responsible section of society supporting responsible beer consumption.The summer season is, at the same time, a period when beer and summer festivals are held. We participate in a number of these events with a social-responsibility project. The main aim of the slogan “I drive and drink non-alcoholic beer” is education and the prevention of driving under the influence of alcohol. For example, festival participants can try out something that is called “drunk glasses”, i.e. glasses eliciting in people the feeling they would experience after drinking alcohol. In conjunction with chain stores and other partners, we are collaborating on a project, which is in fact a Ludo game, the aim of which is to make it less easy for young people to get access to alcohol, not by repression, but by a consistent information and education campaign that will make it easier for sellers to control buyers’ age. Another important project is Czech Beer Days,

held regularly at the end of September, the time when Czechs celebrate St. Wenceslas Day, the day of the patron of Czech beer celebrated since the times of 14th-century Czech King and Holy Roman Emperor Charles IV. The purpose of this holiday of all beer lovers is to support draught beer and revive the Czech pub tradition. The nationwide celebration of Czech beer in draught form is one of the largest events in the Czech Republic, for which the breweries make great preparations and brew dozens of St. Wenceslas specials. Beer-loving consumers can taste limited batches in the latter half of September each year. The days culminate around 28th September, the Day of St. Wenceslas, the patron not only of the Czech Lands, but also of Czech beer and brewers.

What opportunities and dangers can you perceive in your business?

Brewing is a traditional sector of the Czech economy. The best visible asset of

the Czech brewing business is employment generated by the breweries and the amount of taxes returned to the state budget. Breweries pay considerable sums of money into the budget, which amount to approx. CZK 12 billion each year. The overall economic significance of this sector exceeds its limits and extends into areas such as agriculture, logistics, and water supply engineering, as well as catering, retail sale, and public administration. Beer production also supports suppliers in the area of all its inputs, and is itself an important purchaser of products supplied by Czech farmers.

Our sector also plays an important role in providing work opportunities: 1 position in the brewing industry creates 1 job on the part of the supplier; 4.5 jobs in catering, 3 in retail trade and 2.3 jobs in other related sectors. Last year, the multiplicator value, i.e. the value illustrating the added value generated by one crown invested in the brewing industry, exceeded the 2013 level.

This value rose to 2.7 from 1.98 in 2013. For 31 |

BREWING

The Czech Beer and Malt Association The Czech Beer and Malt Association brings together breweries, malt-houses and other institutions participating directly or indirectly in beer brewing in the Czech Republic. The Association builds on a long tradition, going back to the latter half of the 19th century. At that time, the first professional brewing and malting organisations were founded.

Currently the Association has a membership base comprising 26 brewing companies, 7 malt-houses and 19 contributing members. The latter group includes hop growers, manufacturers of beer glass la-

| 32

production sector is about 0.9. One thing that is not making us happy is the domestic downswing of draught beer consumption. There are several reasons influencing bels, technological and technical equipment for the brewing sector, educational institutions, etc. The main objective of the Association is to promote and defend the rights and common interests of its members. It supports the development of activities contributing to the rightful pursuit of the business activities of its members, mediates contacts with the legislative authorities and state administration bodies. The Association also promotes the interests of its members on the international field in brewing and malting institutions and organisations.

More at www.ceske-pivo.cz

this trend. One explanation is that people have wider possibilities of spending their leisure time. Other reasons are workload and the fact that we are using cars much more than we used to before, and cannot drink alcohol if driving.

Do you perceive any strong trend affecting beer brewing in the Czech Republic?

A relatively long-term trend is the rising production of canned beer. Czechs prefer it mainly because it is more practical in many respects. It can be easily stored, transferred and cooled to the right temperature, the can is easy to open and it doesn´t have to be returned to the shop where it was purchased. Because of its lower weight, with no danger of being broken, canned beer is also preferred when travelling. In comparison with bottled beer, cans are also more suitable in various marketing campaigns.

Photo: CzechTourism archives, David Marvan

comparison, the multiplicator value of the entire food production sector as defined by the Czech Statistical Office is 1.6. The multiplicator value shown by the beverage

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BREWING

Trends and Developments in Brewing

This is also borne out by the following figures: success in export, but a downswing on the domestic market, as shown by last year´s statistics. Total output fell by 0.7 %, with production intended for the domestic market dropping by as much as 2.1 %. While in 2016 beer consumption in the Czech Republic amounted to nearly 16.4 hectolitres of beer, last year the volume dropped to 16 million hectolitres. Even worse news for the breweries is that this is happening at the expense of draught beer. The divide between beer consumption in restaurants and packed beer keeps widening. Currently this ratio is already 38 % to 62 %. Another trend is the growing popularity of canned beer.

The increase is 37 % year on year. That is why many breweries are investing in new production lines, according to the report of the Czech Beer and Malt Association.

n BEER PRODUCTION AND

CONSUMPTION IN THE CR IS DECLINING

In 2017, beer production in the Czech Republic amounted to 20.3 million hectolitres, 0.7 % less than in 2016. Beer output for the domestic market, including non-alcoholic beer and imports, declined by 2.1 % year on year. In consequence, the average per capita beer consumption declined as well. Last year, Czechs consumed an average of 138 litres per capita, which is 5 litres less than in 2016. | 34

n LAGER BEER TAKES OVER FROM

DRAUGHT BEER

After several decades, the sale of 11-grade and 12-grade beers once again prevailed over draught beers. Last year, domestic consumption in this category of beer showed a two-per cent increase, to 48.8 per cent year on year, while draught beer held its position at the level of 46.5 per cent.

Non-alcoholic beer was doing well last year, with an output of 578 000 hectolitres.

The output of beer mixes, i.e. beer-based beverages, increased by approximately 30 % year on year, to 301 000 hectolitres.

As regards beer consumption in terms of the method of packing, an increase was shown in both canned and plastic bottle beer (+3 %). The consumption of traditional bottled beer declined by 4 %. As regards barrel beer, cisterns increased by 8 %, while traditional barrels declined significantly, by -7 %. Beer drafted from the cistern is a noticeable trend not only at home, but also with regard to Czech beer exports.

n CZECH BEER ENJOYS GREAT

RENOWN ABROAD

Czech beer exports have been growing continuously since 2011. In 2017, 4.6 million hectolitres of beer was exported by the Czech Republic, a 4.5 per cent increase year on year. “The export of beer in all its forms is growing and so is the number of Czech-type pubs, which I am seeing as a very positive signal. This ap-

Photo: CzechTourism archives, David Marvan

Most of the large Czech breweries and beer brands have their roots in what used to be Austria-Hungary, when the number of breweries was really impressive (for example in 1712, their total was 1 294).

Currently there are around 444 breweries in the Czech Republic and their number has been steadily increasing. Despite the increasing popularity of mini breweries, the Czech market has been dominated by just a few beer brewing plants enjoying an exclusive position, which own most of the large brands (the largest five breweries turn out 88 % of the overall beer output). Czechs hold primacy in per head beer consumption. In actual fact, they have been holding this primacy for nearly a quarter of a century. Nevertheless, they have eased up a little in consuming the golden ale. For example, last year beer consumption declined to 138 litres per person from 143 litres in 2016. Total beer consumption in the Czech Republic is approximately 16.04 million litres per year.

CZECH BUSINESS AND TRADE

plies not only to large breweries, but also to medium-sized and small ones,” says František Šámal, President of the Czech Beer and Malt Association. The growth of beer export to EU countries has slowed down to 2 %. The largest volumes of beer were exported to Slovakia, Germany, and Poland. As regards countries outside the EU, export increased by 18 % in comparison with the previous year. The largest importers of Czech beer were Russia, the Republic of Korea, and the USA. Beer imports last year increased by 2.3 %, but they are still at the lowest level in European comparisons. With regard to EU states, most beer was imported from Poland and, from among non-EU countries, the largest imports came from Mexico. Serbia is also an important destination.

Clock_inzerát_185x128mm_AJ.indd 1

n THE CZECH REPUBLIC IS THE

FIFTH LARGEST MALT PRODUCER IN THE EUROPEAN UNION

In 2017, Czech malt-houses produced approximately 546 500 tonnes of malt, a 0.5 per cent increase year on year. Of this volume, 236 995 tonnes were exported, 11.5 percent less than in 2016. “Export accounted for 43 % of total production, in comparison with 49 % in the previous year,” says Richard Paulů, Member of the Board of the Czech Beer and Malt Association and Managing Director of Sladovny Soufflet. The Czech Republic is the fifth largest malt producer in the European Union. Traditionally the largest importers of Czech malt are Poland and Germany.

“The most dynamic year-on-year growth was shown by exports to Austria and Ja-

pan. On the other hand, exports to neighbouring Poland and Hungary declined, as did, surprisingly, exports to Great Britain,” Paulů adds. In all, Czech malt is exported to 51 countries. An alarming development affecting malting is a decrease in the acreage of arable land, which is giving way to construction. This, together with erosion, is the largest problem affecting agricultural land.

Beer production in the Czech Republic is fully dominated by large breweries, into which a number of world players have entered since the 1990s (see Table). Of the total output of 20 million hectolitres of beer per annum, small breweries account for about 2 per cent. A mini brewery is a brewing plant with an annual output of under 10 000 hectolitres of beer. For compari-

08.11.2018 13:04:28

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BREWING

Benefits brought to the Czech economy by the brewing industry The brewing sector returns CZK 29 billion in taxes each year to the state budget and creates job opportunities for 65 000 people; It pays its suppliers CZK 20 billion per year, more than 90 % of which goes to Czech suppliers; The brewing industry is an important consumer of products supplied by domestic farmers; It is an important supplier to restaurants and cafés, where more than 25 % of their revenue is generated by beer sold to clients;

Source: The Hospitality Sector in Europe; Ernst & Young fermented beers, mainly Indian Pale Ale and American Pale Ale, according to the Czech-Moravian Mini Brewery Association.

Some 50 to 60 breweries let their beers mature in barrels previously filled with some other alcohol, for example cognac. A special type is sour beer. Sometimes it happens that some mini breweries exceed the

10 000 hectolitre limit, and are no longer classified as mini breweries.

n BREWERY TOURISM Brewery tourism has become a trend in recent years. As beer is becoming increasingly popular and most consumers are real sticklers for good beer, there are several places prepared to entertain beer tourists.

In the capital of Prague, for example, there is a mini brewery, U Fleků, which has been serving its dark lager since 1499. There are some 20 breweries in the city, some of which organise excursions (e.g. První novoměstský restaurační pivovar /First Newtown Brewery Restaurant / the Strahov Monastery Brewery Restaurant). The region with the longest brewing tradition is, without a doubt, the Plzeň Region. For example last year Plzeňský Prazdroj (Pilsner Urquell) attracted a record number of visitors. Its beer trails welcomed 762 000 people, 6 000 more than in the 2015 record year. Adding most to last year´s record were Czech tourists, who accounted for 60 % of the total number of visitors. Great interest was also

Photo: pixabay.com

son: Plzeňský prazdroj (Pilsner Urquell), the Czech Republic´s largest brewer, produces more than 10 million hectolitres. In 2017, there were some 400 mini breweries in the Czech Republic, 50 more than in the previous year. Their annual output is mostly less than 1 000 hectolitres. In mini breweries, the trend is the production of ale-type top

One workplace in the brewing industry generates: one workplace on the part of the suppliers, two workplaces in retail trade, five workplaces in catering and two workplaces in other sectors; There are more than 40 000 small restaurants in the Czech Republic, which directly employ 167 000 people and create conditions for the employment of 139 000 more people in related sectors. Pubs and restaurants are an important part of Czech society and people´s lifestyles, often serving as community centres.

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CZECH BUSINESS AND TRADE

COMPANY

design

innovations

QUALITY

In 1992, Mr. Miloš Lindr founded a production and service company in the field of dispensing and cooling systems. Thanks to several years of hard work and because of meeting its customer‘s requirements, a small family business changed quickly into the Lindr Company, a leading Czech manufacturer of dispensing systems. Also nowadays, with the company offering interesting jobs to more than one hundred people, and having its own complete production program, Lindr still proclaims the visions of a family business, built with purely Czech capital.

Since the beginning, Lindr has been going its own way with own original products, having been both as for the technical side and its own irreplaceable unique design. Using a high quality polished stainless steel in combination with natural hardwood leads to entirely original and ageless details.

Both ideas and innovations of Lindr have been highly successful on the Czech, European and world markets. Lindr’s development and innovations always includes the requirements and experience of its customers, and the company keeps the best ratio of performance/ quality / easiness / design / price.

Lindr is aware of the quality of Czech beer and of the beer culture.

In order to be proud of this world top position, and to increase this quality with our products, Lindr has been using only certified materials and raw materials meeting the strictest demands for the hygiene and CE standards, which guarantee high quality, reliability, long working life and ageless design.

Every year the company enriches the market with entirely original innovations. At present, Lindr has the widest range of dry beer coolers and of coolers with the smallest dimensions as for the given performance on the European market.

Dry coolers

Luxury dry coolers

Undercounter coolers- CWP

Undercounter coolers- AS

Dispense equipment for wine makers

Soda coolers

Dispense towers

ACCESSORIES for dispensing EQUIPMENT

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BREWING

shown by visitors from Asia, mainly China, Taiwan, and South Korea. Last year, their number exceeded for the first time the number of German tourists, who used to be traditionally the most numerous foreign group of brewery restaurant visitors. To mark the year´s first brew of low-fermented ale, a beer festival, the Pilsner Beer Festival, is held in Plzeň each year. A frequent destination of beer lovers is the family brewery in Chodová Planá with its unique labyrinth of beer cellars. Within the premises, there is also a Brewery Museum and beer baths.

Outside in the garden, traditional beer festivals and European beer barrel rolling championships are held.

Some of the industrial and mini breweries in South Bohemia decided to join together and form the now popular South Bohemia Beer Trail. The participating breweries include Budvar, Samson, Dudák, and a number of mini breweries. An additional offer is a visit to the Eggenberg Brewery in Český Krumlov and the Zvíkov Brewery Court.

Another brewery tour is the trail linking 16 breweries situated in Bohemia and Germa-

ny, which provides interesting experiences to tourists, combined with beer drinking.

Tasting pale and dark lagers using the Žatec hops strains, barley-based pale ales brewed according to old German recipes and refreshing low-alcohol lemonades, combined with hiking in the Ore Mountains may become an inimitable gourmet excursion. The beer trail passes by mini breweries in particular, which offer specialities not available in the shops. Flowing out of their taps are porter-type beers and stouts, top fermented ales and Radler beers brewed with herbs from the Ore Mountains using fresh spring mountain water.

On the Czech side, visitors may stop in seven breweries situated in five towns. On the German side, the tour leads through five towns with nine breweries. Žatec, the beer centre situated in the Ústí Region, is termed a “Town where beer has its home”.

There is also a tourist centre called the Temple of Hops and Beer, which organises the Žatec PIVO CUP Bartender Competition. Another event linked with beer held in Žatec is the Žatec Harvest Festival, which rounds off the Hop Summer cultural event.

Primátor is a favourite brewery in the Hradec Králové Region, which organises tours of the brewery premises combined with the tasting of its 15 different kinds of beer.

Primátor is also scoring success in international competitions: for example, in 2018 its Stout brewed in Náchod won the World Beer Awards competition organised in London in the Beer Styles category. The mini brewery in the Luční Bouda chalet

List of the largest breweries, brands and their owners Beer brand

Majority owner

Pilsner Urquell, Gambrinus, Radegast, Velkopopovický kozel, Primus

Asahi Group Holdings, Japan

Pivovary Staropramen

Staropramen, Velvet, Ostravar, Braník, Vratislav

MolsonCoors Brewing Co.,Canada and the USA

Heineken Czech Republic

Zlatopramen, Krušovice, Starobrno, Březňák, Dačický, Hostan, Louny

Heineken N.V., the Netherlands

Budějovický Budvar

Budějovický Budvar, Pardál

State enterprise, the Czech Republic

Pivovary Lobkowicz Group

Lobkowicz, Platan, Uherský Brod, Merlin, Klášter, Rychtář, Černá Hora, Ježek

CEFC Group (Europe) Company, China

LIF Group

Svijany, Rohozec, Primátor

LIF Group, the Czech Republic

PMS Přerov

Holba, Litovel, Zubr

HSK Invest, the Czech Republic

Bernard Family Brewery

Bernard

50 % Duvel Moortgat, Belgium, 25 % Stanislav Bernard, 25 % Josef Vávra

Pivovar Nymburk

Postřižinské pivo

Ing. Pavel Benák, the Czech Republic

Pivovar Samson

Samson

Anheuser-Busch InBev, Belgium

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Photo: Budvar archives; CzechTourisms archives, David Marvan

Name of brewery Plzeňský prazdroj

CZECH BUSINESS AND TRADE

in the Giant Mountains is very popular. It is the highest-lying brewery in the Czech Republic. In the Vysočina (Highlands) Region, the most visited breweries are Želiv, located in a monastery, where the beer is brewed by the monks. In Humpolec, beer festivals are held under the auspices of Bernard brewery. In Moravia, beer lovers

may pay visits to several popular breweries.

The Černá Hora (Black Mountain) Brewery has created a beer cycle tour and is the initiator of the beer pilgrimages held each year.

The best-known beer in the Moravia-Silesia Region is Radegast, brewed in Nošovice.

Not far away, in Ostrava, another brewery, Ostravar, offers its beer to visitors.

Dividing line between large and small brewery: Annual output of under 10 000 hl of beer = mini brewery Number of large breweries: 45 Number of mini breweries: 370 Increase in the number of mini breweries in the past calendar year: 50 Aggregate output of all breweries: 20.5 million hectolitres Proportion of mini breweries: 2 % Total beer consumption in the Czech Republic is 143 litres per head

n BEER BATHS Beer baths are another attraction prepared within the framework of brewing tourism. This attraction does not include only baths, packs and massages, but also beer drinking. The objective of this procedure is harmonisation of the organism, relaxation and mental rest. Enjoying beer baths in the Czech Republic was made possible in 2006, when the first baths were opened by the Chodovar family brewery in Chodová Planá. Relaxation is provided by the Il sano mineral water, hops and beer yeast. Visitors can also try out beer baths in Pikard brewery in Ostrava, or in Písek u Jablunkova. Štramberk baths, known as Lachia beer baths, collaborate with Štramberk Brewery.

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J4 – 25 Years in the Market

The firm J4 has been in the bakery technologies market for 25 years and will celebrate this anniversary in April 2019.

bread, buns and rolls, supplied in large quantities, which gave rise to the industrial baking tradition and the use of tunnel ovens in the Czech Lands and Slovakia, which made it possible for J4 to enter During those years the company based in East further markets, at first in the East and later also in Bohemia has turned out more than 700 industrithe West, and now practically worldwide. al tunnel ovens and has grown into an important actor in the world markets in its line of business. Last Currently, J4, with the industrial use of its tunnel year alone, for example, it manufactured 28 baking ovens turning out an indeed wide range of conveyer ovens, which were fitted into its partners´ products, from Central European traditional items, assembly lines, or the company used them in its such as brown and white bread, to baguettes, own systems. The company´s beginnings were built pastries, cake corpus, croissants and muffins, to on the consumption of domestic products, such as pizza, Arabic bread, biscuits, crackers, and sticks.

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This year, J4 has manufactured 28 ovens for semi- or fully automated lines installed in the Czech Republic, Slovakia, Belarus, Lithuania, Russia, Kazakhstan, Israel, Jordan, the Netherlands and even some remote countries, such as Brazil and South Korea.

Naturally, such wide-ranging production cannot do without painstaking development, advanced technical equipment and skilled workers. The optimum number for our firm is about one hundred employees. Regrettably we must say that J4, like other technologically and technically oriented firms, is facing a shortage of technically skilled people, which we are temporarily solving by employing foreign workers. To eliminate this shortage in the near future, we are planning to build a new manufacturing hall to be completed in 2020, which will be fitted with a new type of fully automated tunnel ovens that will be able to independently react to production needs.

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BREWING

Czechs Enjoy Beer Tourism The following are questions we asked Mr Jan Šuráň, President of the Czech-Moravian Mini Brewery Association.

What, in your opinion, are the most pronounced tastes and trends in brewing?

The unequivocal leader is still the Czech lager. Some breweries, however, are trying innovate, such as New England IPA, sour beer and different forms of barrel-aged beers (strong beers maturing in wooden casks previously filled with spirits or wine).

More than 20 new mini breweries open each year. What is the reason behind this growth?

Mainly the desire to have one´s own brewery (whatever the motivation may be) and the stable economic environment, which is what mini breweries need. But I must

correct your figures a bit: there are not 20, but about 50 new breweries opening up each year, with one of two of them having to close down.

nying services, transport, accommodation, beer brewing as entertainment, beer baths, moderated beer tasting, etc. Beer brings people together and lifts their mood.

What does it entail to build one´s own mini brewery?

Investments of between 5 and 20 million and deciding how the beer will be sold.

Whether in the open market, or in one´s own restaurant, etc.

What opportunities and threats can you see in your branch of business?

There are lots of opportunities, from introducing new kinds of beer to providing comprehensive services. On the other hand, there are mini breweries yearning to bring old times back. Practically none of the existing mini breweries exports its beer or know-how. This is a common practice in the world, maybe an example to follow.

Czechs enjoy beer tourism; regional breweries are becoming a tourist hit. Is this hobby also attractive to foreign visitors?

What does beer tourism actually mean?

It means mainly exploring new tastes (no two beers are the same) and new regions, which is a programme foreign tourists really like. In other countries, beer tourism is much more sophisticated than it is here. Beer tourism does not mean just beer drinking and tasting. It covers a full range of accompa-

Do you perceive any strong trend that influences the mini brewery business in the Czech Republic?

It is definitely the increasingly aggressive bureaucracy. State dirigisme, often absurd orders and obligations, which annoy people so much that they lose interest in staying in business.

9th INTERNATIONAL TRADE FAIR FOR HOTEL AND RESTAURANT EQUIPMENT, FOOD AND GASTRONOMY • Representation and cooperation with various unions, associations and companies associating experts as well as entrepreneurs in the HoReCa sector • Specialised lectures and workshops for professionals as well as the general public with specialised topics • Accompanying programme – practical presentations from gastronomy, workshops, seminars, conferences • The trade fair offers, on an annual basis, a highly profiled group of as many as 30,000 visitors – potential customers with an interest in new trends and inspirations in gastronomy • Extensive advertising campaign

| www.for–gastro.cz |

10–13 October 2019 10 October 2019 | www.kongresforgastro.cz

GASTRO_19_185x128_en_.indd 1

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07.11.18 16:52

CZECH BUSINESS AND TRADE

Greatest Barrier to Faster Growth is Labour Shortage Vladimír Dlouhý, head of two important institutions, the Czech Chamber of Commerce (CCC) and the International Chamber of Commerce Czech Republic (ICC CR), points out that the Czech Republic has always been and still is an industrial great power. To remain such a power in five or ten years, this country must “do its homework”.

The Czech economy is doing well, GDP in 2017 grew by 4.5 %. What growth do you expect for 2018? How, in your opinion, are businessmen doing this year?

Our just updated prognosis for this year is sizable growth of GDP, which will surely not be less than 3 per cent. Our surveys, which we conduct regularly among businessmen, show that firms see the labour shortage as the greatest obstacle to faster growth. They also criticise excessive bureaucracy and complicated administration.

In these areas in particular, the state is not acting quickly enough.

2018 is a year of celebrations marking the centenary of the birth of Czechoslovakia.

Which special milestones can CCC and ICC CR mention in this connection?

The year 2018 is an important milestone for CCC. We commemorated the 25th anniversary of the founding of the new Chamber of Commerce. As the largest representative of businessmen and entrepreneurs appointed by law, we have a good base to build on and I can promise that the Chamber will also be here for businessmen in future and will defend their interests in all respects.

ICC will mark its anniversary next year, when 20 years will have passed since it began to pursue its activities in the Czech Republic. At the same time, 100 years will have passed since the founding of the ICC world organisation.

You have been President of the Czech Chamber of Commerce and Chairman of ICC CR for four years. How are these organisations developing under your management? What, in your opinion, is your greatest success achieved with respect to businessmen during that period?

As I have mentioned before, we are fighting most vehemently for businessmen, especially at the legislative level, where it often happens that the law or amendments directly endanger the stability of the company environment in the Czech Republic.

What I would like to point out is the fact that the Chamber helps businessmen with their greatest problem – labour shortage. Thanks to the Ukraine Programme, which has been running successfully for more than two years, our firms need not refuse contracts for lack of labour, because they will find capable employees for their manufacturing plants in Ukraine. Similarly, we also help with recruiting workers from Serbia, the Philippines, and Mongolia. However, my repeated warning is that this is just a short-term solution. In the long run, it will be necessary for the state to give greater support to the technical sectors and the apprentice training system. The fact is that the current turnout from schools under the existing education system does not meet the demand of the labour market. Using an exaggeration, I would say: We don´t need hundreds of sociologists and philosophers, however valuable their work may be, it is rather a greater turnout of apprenticed plumbers, carpenters, chimneysweeps and other craftsmen in short supply that will push our economy ahead.

As regards the International Chamber of Commerce, where my mandate as Chairman expires in December, we are active in the international field and are increasingly involved in international trade issues. For example, for two years we have been using our position as observer within the UN to comment on various issues, especially the greatest obstacles to entrepreneurship. We give our opinions, for example, on sanctions or impending business wars, which are a current topic just now.

Do you perceive any strong trend or expectation, which is influencing the Czech economy and industry in 2018?

Already now we are beginning to perceive a slight slowdown and signals from the

economy confirm this. At the same time, the labour shortage is forcing firms to raise wages, by up to 8-9 per cent a year. It´s great that people are faring well, nevertheless I would be cautious, especially if the growth of wages is not derived from real labour productivity. And, in addition, there is a pressure from the trade unions for a non-systemic raising of minimum wages. At the time of a record high boom, all these factors are not perceived as a potential problem. At a time of recession, however, which is certain to come one day, we could pay for it dearly.

I don´t want to scare anyone, because our economy has really been doing extremely well in the past few years and people are living extremely well, indeed better than ever before in history; nevertheless we should think more of the rainy day.

What, in your opinion, is the position of Czech industry in the world?

The Czech Republic has always been and still is an industrial power. To ensure that it retains this position, however, we must “do our homework”. One area where the Czech Republic is lagging behind is building the fast internet networks which are absolutely indispensable for the future of industry. It is an illusion to think that without the needed infrastructure we´ll attract firms with higher value added. This, however, is not a problem of just the digital infrastructure, the attractiveness of a country also depends on the condition of its transport infrastructure, which is not extremely dazzling in the case of the Czech Republic, mainly because of the lengthy permission proceedings.

Another important point in this respect is education. In ten years there will exist professions we hardly even have a vague idea about. The education system must therefore be adjusted to it, starting with elementary schools. The value must first be added to the education system, and only after that can the same be required from the firms.

Irrespective of the problems mentioned above, Czech industry is a motor force of our economy, generating an important part of GDP. We must not let ourselves be lulled by our achievements, but must work hard so as to ensure that industry can retain its position also in the years to come.

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PR

Bohemiachlad – Partner to Demanding Clients Seeking the Best in the Area of Cooling Devices Bohemiachlad, s.r.o., Praha, a purely Czech company, which has been in the market for more than 20 years, offers designs, projects, deliveries, and realisation of cooling equipment targeted to energy savings and minimisation of the use of coolants. “We offer complete solutions of cooling machinery systems, design, delivery, and assembly of new equipment and the reconstruction of existing machine parts and spare part deliveries, including complete servicing,” says Josef Knebl, Executive Director of the firm. The company, which has realised contracts with important breweries, dairies and prestigious companies, such as Unilever, Heineken, Anheuser-Busch InBev, and Lactalis, has set itself bold aims for its development.

Wherein lies the “secret” of your success?

Our cooling and air conditioning circuit regulation system guarantees its users operating energy savings of up to 30 % and a reduction of the volume of coolant within the circuit by up to 60 %. Further operating savings by 10-15 % can be achieved by computer-controlled coolant spraying into the heat exchanger or another type of installed cooler. In view of the current and future expected | 44

growth in energy prices, the cost of energy used for the operation of cooling devices will become increasingly important. That is why we have decided to offer our clients a control system and cooling device regulation to achieve maximum savings, especially by eliminating the historical cooling system switching errors.

Which are the greatest recent achievements your firm can be proud of?

Our firm mostly operates in the territory of the former Czechoslovakia, but it does not focus exclusively on Czech or Slovak clients. We have achieved very interesting results by collaboration with firms such as Heineken, Anheuser-Busch InBev, Lactalis, the Svijany brewery, the dairy in Choceň, the Schneider meat-processing factory, Unilever, Madeta Dairy, and Keiser Food. Because of the direct cooler spraying system we use, only a minimum NH3 cooler reserve is needed, which fully meets current standards and the requirements for cooler charge minimisation. Together with the use of the Bohemiachlad liquid, we contribute towards improving the environment.

You want to become more widely established in foreign markets.

Why should demanding customers want to choose you specifically for collaboration?

As mentioned before, we collaborate successfully with supranational corporations operating in our market. This is certainly a sufficient prerequisite for our presence in foreign markets. After all, we have already recently realised several projects in other countries. It is true that we are a smaller firm in our branch of business, but the advantage of our size is that we can be much more flexible. Another benefit is the guarantee of services our firm can offer. If the customer signs a service contract with us providing for guaranteed service supervision, they can rest assured that his cooling equipment will be regularly monitored by our service workers. The control system is fitted with a remote control and administration module, enabling not only our technicians, but also the customer, entry into the monitoring system anywhere in the world and the ability to check the condition of the cooling device. Being an

active remote control system, it allows our technicians, in collaboration with local attendants, not only to re-set the engine room parameters, but also to start or stop the cooling device.

You also participate in foreign business missions; for example, last year you attended the Russian-Czech Business Forums in Moscow and Yekaterinburg.

Can you give us some details?

Our people have good experience with this market from previous such events.

The current sanctions generate an effort in Russia to build their own industrial projects, especially in the food industry. This is where we can find opportunities in the form of subcontracting for the delivery of industrial cooling systems. As Russia constitutes a huge market, there are still other possibilities, for example, the delivery of cooling equipment for sporting purposes, e.g. skating rinks, etc.

What are your specific plans for the development of your company?

We are trying to pass on to the younger generation our former experience gained in Strojobal and now our experience of more than 20 years in Bohemiachlad. We place great emphasis on our workers´ language skills, which are directly connected with our efforts to expand to foreign countries. We also pay much attention to the application and further improvement of modern global technologies and trends. We want to continue on our way towards reducing energy intensity and improving work safety. We want to protect the environment by using alternative cooling sources.

Do you perceive any strong trend which is currently influencing your line of business?

It is especially the increased demand for new, modern equipment, which must meet strict regulations within the EU. Obsolete plants are forced to carry out partial reconstructions or complete overhauls.

The innovation process, however, is hampered by considerable bureaucracy and a lack of skilled workers within the branch.

The overheated EU economy, too, is causing us considerable problems, which in turn generates a bad morale in supplier-customer relationships.

CZECH BUSINESS AND TRADE

Bohemiachlad spol. s r.o.

bohemiachlad.eu is a supplier of

industrial ammonia cooling systems, industrial air conditioning systems and heat pumps, including control systems and automation, especially for meat processing plants, dairies and breweries.

We offer the full range of services, from project designing and engineering to the delivery and assembly of cooling circuits, air conditioning and heat pumps, supplied as a turnkey project.

Bohemiachlad spol. s r.o. | MoĹžnĂŠho 818/17, 161 00 Praha 6 | Czech Republic Phone: +420 274 773 546 | E-mail: info@bohemiachlad.eu

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ANALYSIS

Czech Alcoholic Beverage Market Is Growing The annual volume of alcoholic beverages sold in the Czech Republic amounts to 78 million litres (an equivalent of 26 million litres of pure alcohol used for the production of beverages containing 33 per cent of alcohol), less than 20 per cent of which are imported brands. In 2017, the Czech alcoholic beverage market grew by 3 per cent.

Stock Plzeň-Božkov (Stock Plzeň) is number one on the Czech market. It has been producing the finest traditional alcoholic brands and bitters for more than 85 years.

Its broad range comprises renowned brandies, including Fernet Stock, the most-favoured Czech brandy. Besides the growing assortment of the Fernet brandy varieties, Stock Plzeň offers a number of other brands, for example the popular Amundsen vodka, Božkov domestic rum and Stock plum brandy. With its portfolio comprising more than 40 products, Stock Plzeň is the market leader in terms of the volume of alcoholic beverages consumed. The Likérka Stock Distillery holds a one-third share of the Czech alcoholic beverages market. In 2017, the firm sold nearly 25 million litres of spirits, 8 per cent more year on year. | 46

Czech Domestic Rum versus the EU In 2018, the Czech Republic obtained an exception for its favourite “Tuzemák” (Inlander) rum, or rather for the rum ether being added to it. The Commission wanted to have the use of this substance banned, arguing that it may be dangerous to human health. Tuzemák is extremely popular in the Czech Republic, even so much so that one in every four bottles of spirits sold contains Tuzemák.

This spirit came into being in the former Austria-Hungary at the end of the 19th century as a substitute for the cane rum imported from the Caribbean. It was decided that Tuzemák producers would be

turned out a record 19 million bottles of liqueur. Its exports are mainly the typical Czech specialities, Old Myslivecká brandy, Haná Vodka, absinth and the plum and pear brandies. It is the largest purely Czech producer of spirits in the domestic market.

The firm´s production portfolio comprises more than 100 different products.

Another important player in the market is the Rudolf Jelínek liqueur producer in Vizovice, whose revenue last year amounted to CZK 454 million, 3 per cent more than in the preceding year. Its largest investment project this year, amounting to CZK allowed to continue adding the rum aroma to their favourite liqueur for another five years. When negotiating the exception with the European Commission, Tuzemák producers used as one of their arguments the proof of the long-time traditional usage of the aroma in these spirits. As a result, Tuzemák producers were allowed a five-year respite, which they should use for developing a verified substitute for the rum aroma. Czech distillers, however, want to use the five years to prove that the substance is not harmful and that it has been used in this form for more than a century, without any undesirable effects being proven.

Photo: www.freeimages.com; Jan Becher - Karlovarská Becherovka archives

n PLAYERS IN THE MARKET

The second largest distillery in the Czech Republic last year changed its name. The former Granette & Starorežná Distilleries is now Palírna U Zeleného stromu, in continuation of the 500-year-long tradition of the Prostějov distillery. Granette & Starorežná Distilleries was established in 2011 by the merger of Granette and Starorežná Prostějov. In 2012, the firm moved its production of spirits from Ústí nad Labem to Prostějov, where Palírna U Zeleného stromu has been turning out spirits for centuries. The distillery is expanding its exports to the USA, Vietnam, Nigeria, and Ecuador. Last year, it

CZECH BUSINESS AND TRADE

150 million, is the continuing construction of the Visitors’ Centre in Prague. Last year, the company´s investments amounted to more than CZK 28 million, twice as much as in 2016. Its largest investment last year was the construction of a formal hall in Vizovice, where the company holds various social events. The company exports its products to 35 countries worldwide. Its exports accounted for 31 per cent of its revenue. Its most important foreign markets are Slovakia, the USA, Poland, Russia and Germany.

Its new export markets are Hong Kong, Argentina, and Panama.

n BECHEROVKA, THE POPULAR

CZECH HERBAL LIQUEUR

The renowned Czech Becherovka herbal liqueur first appeared in the market 211 years ago. At the birth of this “thirteenth healing spring” of Karlovy Vary (Karlsbad) Spa were Josef Vitus Becher, a pharmacist and businessman in Karlovy Vary, and the English doctor, Christian Frobrig. In 1904, the firm became “Supplier of the Imperial Court” in Vienna. Its supplies amounted to 50 litres of Becherovka a month. The liqueur gained in popularity during the First World War, when it was distributed to soldiers at the front and the spirit found its way to countries as far away as Turkey and Egypt. In 2001, Becherovka Distillery was privatised and passed into the hands of the French group of Pernod Ricard, one of

the world´s largest distillate and wine producers. Since 201I, the distillery has been producing the liqueur in a modern plant built in the Bohatice district of Karlovy Vary.

Becherovka contains extracts of more than 20 different kinds of herbs imported from all over the world, alcohol, a sugar solution, soft drinking water and various other raw ingredients. Only two people know the recipe for the production of the liqueur, according to information on the company´s website. The annual output of Becherovka is ten million bottles. The liqueur has won a number of awards, for example, in 2011 and 2012, it was placed among the world´s ten best alcoholic drinks according to the Lonely Planet Guide. The best-known cocktail made with this liqueur is called Beton (Becherovka with tonic), which was first presented at the Expo ´67 in Montreal. This year, the Jan Becher – Karlovarská Becherovka company turned out a special batch of 40 000 bottles of Kosher Becherovka, twice as many as three years ago, when the distillery first started its production. In making Kosher distillates, the use of raw ingredients, manufacturing equipment or processes contradictory to the Jewish faith may not be used. To be in compliance with Kosher rules requires undergoing a complicated process of approvals and controls of the composition of the ingredients, the production process and technology used.

As regards Becherovka, which is a purely

Union of Czech Spirit Producers and Importers In 1994, seventeen producers and importers, representing more than 80 % of the Czech market, founded an association, the Union of Spirit Producers, with the aim of supporting and defending the common interests of its members and of representing them in relation to external entities at home and abroad. More at https://www.uvdl.cz/. natural herbal beverage, the problem is not the liqueur itself, but the production technology used. The whole production process is supervised by a Controller of the Jewish Community, who checks to see whether the production process accurately follows the procedures approved by the Rabi. The actual process is the same as in the case of standard Becherovka. The difference is that, for certain ingredients, Kosher certification is needed.

n DISTRIBUTORS In different markets, the distributors mediate the sale of own brands. Sometimes, however, they may have contracts for the sale of products supplied by foreign producers. In that case, they get a share of the revenue and are responsible for promoting those products in the Czech Republic.

Among Czech manufacturers these services are provided, for example, by Jan Becher (selling Jameson whiskey), Stock Plzeň Božkov (selling Johnnie Walker), Palírna U Zeleného stromu (selling Bushmills), and Rudolf Jelínek (distributing the Austrian rum, Stroh). Some of the leading distributors are firms which do not produce alcohol themselves, but mediate the sales of foreign producers and smaller domestic manufacturers. Global Wines & Spirits s.r.o., founded in 1996, is one of the largest importers and distributors of brand distillates in the Czech Republic. It has been representing some of the renowned brands for more than 10 years. Recently, it became the exclusive importer and distributor of the Bacardi-Martini brands, which comprise Bombay Sapphire gin, Grey Goose vodka, and William Lawson´s whiskey.

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PR

Unique Projects of LabMediaServis

LabMediaServis operates in three areas of business, IVD, veterinary medicine, and food and water hygiene. “Our customers are microbiological workplaces, not only hospitals, but also private laboratories, which we supply with cultivation media labelled as IVD (in vitro diagnostics designed for human medicine diagnostics),” says Hana Krejčovská, Managing Director of LabMediaServis s.r.o.

Other customers are laboratories concerned with soil and food sample testing.

n PM TEST For the past few years, the firm has been working on the development of a product to test cattle for mastitis. Thirty per cent of its customers are farms and veterinary doctors concerned with this disease. “As regards the diagnosing of mastitis, i.e. inflammation of the mammary glands in cows, we have developed a chromogenic method named the PM test. In practising this method, we use a three-sector plate with | 50

three different chromogenic media soils on which it is diagnosed in great detail. It is an accurate and fast diagnostic method. After instruction by our veterinary specialist, a zoo technician or farm vet, using a milk sample, can determine, right on the farm, the mastitis problem in the cow within 24 hours. On the basis of the results, antibiotics are administered. In the early stages of the disease, however, it is possible to treat the cow locally by supportive therapy without the use of ATB,” says Krejčovská.

For its speed and accuracy, this diagnostic method was awarded Gold Medal at the TECH Fair (International Livestock Production Fair) in Brno in 2017. The unique nature of this product is borne out, among other things, by the fact that one globally recognised company is showing such interest in the product that it would like to become its exclusive global distributor.

The PM test is not the only remarkable product of the firm. Another product, named Metricult, has also won popularity among its clients. It is a set for the examination of cows and mares for inflammation of the uterus. “Since 2016, this product has been protected by patent,” Krejčovská adds.

LabMediaServis produces cultivation media not only according to standard formulas, but also according to clients’ specific requirements. For its forthcoming approach to the customer, the company won the Finalist of the Year 2017 Award in Náchod in the “Firm and Tradesman of the

Year of the Hradec Králové Region” contest in the category of “Trading Company with Under 50 Employees”. It placed first in the Náchod District.

n COMPANY DEVELOPMENT

IS OF KEY IMPORTANCE

What are the company’s plans for the future? At the end of 2018, LabMediaServis will innovate its technological equipment at a cost of millions of Czech crowns. The investment will make it possible for the company to manufacture larger volumes of products. At the same time, the new technologies will guarantee an even higher quality of the products and their faster production. “Next year we would like to place another new item in the area of veterinary medicine on the market. Final tests are currently taking place at the Veterinary Medicine Institute in Brno. Naturally we are working on the enlargement of the range of IVD cultivation media. Our aim is the satisfied customer and high quality production,” Krejčovská says in conclusion.

Contact: LabMediaServis s.r.o.

Národní 84 551 01 Jaroměř Czech Republic www.labmediaserviscz E-mail: info@labmediaservis.cz

Photo: LabMediaServis s.r.o. archives

LabMediaServis s.r.o., founded in 2007, is not just a manufacturer concerned with the production of cultivation media, blood derivatives, and diagnostic solutions. It is also an important player in the market covering the areas of veterinary diagnostics, mastitis in cattle, endometritis and metritis in large farm animals.

Besides microbiological laboratories, the firm´s customers are also veterinary institutes and a number of other companies concerned with these issues.

View of self-service beer bar with 2S2B terminals

Self-Service Beer Bars – Unforgettable exBeerience!

It´s nearly unbelievable how far information technologies have got over the past half-century and how they are influencing human activities – from credit cards to driving and car making to computer games and …partly also beer drinking. Don´t you believe this?

Self-service beer restaurants, where the guest can draw several different brands of beer from a single table, and beer clubs where dozens of different brands are available at the beer wall, are evidence of this. The trend is also to use identity cards allowing guests to move freely around the premises to try out the wide choice of beers. These restaurants, bars and clubs are becoming increasingly popular. For brewers, too, this phenomenon is interesting in terms of sales.

MCAT AUTOMATION in Plzeň (Pilsen), the “Beer Metropolis”, together with PELIKÁN company, manufactures a global product supplied on an international scale under the 2S2B (Self-Service Beer Bar) trademark.

2S2B is a unique technology for self-service bars, where guests can themselves tap their own beer right at the draft beer table, order a meal and music, communicate with other guests and, with the aid of the touch terminal, participate in different General Knowledge quizzes (e.g. Beer Trivia). The 2S2B trademark is registered in more than 30 countries (EU,

www.mcat.cz www.2s2b.com

USA, ...) and with the World Intellectual Property Organisation (WIPO) in Geneva.

2S2B – a combination of the most up-to-date beer dispensing technology, information technology, mechanics and hydromechanics.

2S2B – a comprehensive automated system, including information connections in real time to other restaurants of this type all over the world; connection to cashier systems, database of music systems, etc.

To date, nearly 70 projects of this type have been realised in 11 countries, both within and outside the EU. In the USA, the 2S2B system has obtained permission from the Liquor Control Board (LCB). In the European Union, guests will have the opportunity to use the 2S2B technology, for example, in The PUB franchise chain.

The typical size of the 2S2B project is 10 to 15 self-service beer tables, but there are projects with more than 20 or 30 tables. A selection of up to four different brands of beer can be tapped at one table. The configuration of the different brands can easily be changed at the tables. This creates a synergic effect and, for the investor, this type of non-traditional bar or restaurant is an incontestable competitive advantage. Reservations at such restaurants must be made weeks in advance.

Contact:

Dr. Jaroslav Stuna Managing Director, MCAT AUTOMATION s.r.o.

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