What Are the Reasons Behind the Economic Performance of the Hungarian Beer Industry? The Case of the Hungarian Microbreweries

Abstract

In terms of absolute alcohol consumption and total quantity consumed, beer is the most consumed alcoholic beverage in Hungary. The Hungarian beer industry is highly concentrated, the three largest, foreign-owned companies ruled the market for almost 90% of total turnover in 2009–2017. The study investigates the factors influencing the Hungarian beer industry’s economic performance, special attention given to the microbreweries. The analysis applied panel-data linear models for the period of 2009–2017. The financial performance of breweries is represented by companies’ turnover, Earnings Before Interest and Taxes (EBIT) and profit along with explanatory variables of the age of brewery, Social Media activity, geographical location, direct sales, and impact of tax reduction. Breweries with direct sales channels reached significantly higher sales, EBIT and profit. Breweries situated in or close to the capital are the most profitable due to the higher demand for high-quality beer, in contrast, the distance from the capital had a negative impact on the firms’ performance. The Social Media activity–often used as the only promotion channel for the microbrewery–positively impacts the brewery’s profitability. Finally, tax reduction for small breweries introduced in 2012 had the most significant positive influence on the industry.

Beer Industry in the Czech Republic: Reasons for Founding a Craft Brewery

“…Some owners of craft breweries (25%) financed their investments themselves, others (75%) used a combination of their own money and bank loans or subsidy titles granted by the Ministry of Agriculture or industry and trade of the Czech Republic. A similar reason is given by Jantyik [5]. Another thing apparent from the results is the fact that only 5% of the current craft brewery owners have worked for an industrial brewery before the craft brewery's establishment.…”

“…Contemporary global beer production is under the control of a few large brewery groups: Anheuser-Busch InBev (AB InBev, Leuven, Belgium) including SAB Miller (London, Great Britain), Heineken (Amsterdam, the Netherlands) and Carlsberg (Copenhagen, Denmark), Asahi Group Holding (Japan). These companies make up approximately 41% of global beer production [5]. The beer prepared by these large companies is very homogeneous and it is exactly homogenization of beer that is one of the reasons for craft beer's success [6].…”

A kézműves sörgyártás vizsgálata gazdasági és élelmiszerbiztonsági szempontból

“…2021 augusztusától viszont a törvény alapján több helyen is elérhetőek a kisüzemi termékek, mivel a vendéglátóegységek a sörcsapok 20 százalékán kötelesek kisüzemi sört tartani, illetve megszűntek a kizárólagos szerződések a három legnagyobb hazai sörgyártóval (Magyar Közlöny, 2020). Emellett a 2012-ben eszközölt kisüzemi adócsökkentés is a sörfőzdék javára vált, mivel a jövedelmezőségi görbéjük emelkedni kezdett az intézkedést követően (Jantyik et al 2021).…”

How do factors of brand-related behavior (brand loyalty, brand relevance in category, brand schematicity) impact consumers’ alcoholic drink purchases?

“…Similarly, the Hungarian State is attempting to support microbreweries through legislative measures, such as the 2020/CXL, a bill that mandates that a catering business selling drinks must sell products from at least two different manufacturers per product type when selling beer. The Hungarian state’s intervention is aimed at restructuring the market, paying attention to the importance of the beer market, which has thus far been dominated by three large foreign-owned companies (Jantyik et al , 2021).…”