How did the breweries of Eastern Europe fare during Communist rule and the transition to the free market?

by stevopedia

Poland and especially what was Czechoslovakia during the time in question have a very long tradition of brewing and consuming beer. For example, pilsener was first brewed in, and got its name from, Plzeň. Many of the breweries operating in those countries today can trace their roots well before World War II. What happened to them under the Communist regimes and after? And, in a related question, how available and affordable was beer to the average citizen in those countries?

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The answer regarding Czechoslovakia is fairly simple, and I suspect the story would have been quite similar with Poland. They were nationalized. Now this process had already begun before the communist takeover of 1948, as the National Front government took over major industries and businesses following the war. In this decidedly fragile and uncertain immediate postwar period, the coalition was communist-influenced, but not yet outright controlled by the future ruling party.

At first, those breweries producing at least 15 000 000 litres of beer a year were nationalized, later followed by smaller ones. After the 1948 coup, they had quite obviously stayed nationalized and were put under the purview of 22 "national enterprises", think a large business, only ran by the state, divided by regions. This setup had remained until 1960 when a new regional division of Czechoslovakia was drawn up, and the brewery controlling entities were reorganized accordingly.

In the postwar years, about two hundred and fifty breweries were in operation in Czechoslovakia, and by the sixties, some 105 breweries remained as a result of collectivization, mergers and the like. These were state-controlled and subject to the centrally planned economy. That does not mean they would all be the same, however, as the individual brands had largely continued to exist. Several would be exported throughout the other COMECON countries. Some, such as Plzeňský Prazdroj and Budějovický Budvar, were even sold to the west. There also were newly established breweries, such as Radegast in 1970 which has remained active to this day.

During socialism, beer was readily available pretty much anywhere and for reasonably low prices. Although I am reminded of a slightly amusing anecdote – in the somewhat well known Czech novel The Good Soldier Švejk, the titular character proclaims the government that would raise the price of beer would fall. In the sixties, beer was indeed made more expensive, and the government did not survive long. But, to be fair, that had nothing to do with beer and everything with the events of 1968 and the Prague Spring. Then, in 1984, beer prices would almost double. In five years, the communist rule would be over. Still, despite the price hikes, beer has always remained a relatively inexpensive beverage.

On a more serious note, as with many branches of industry at the time, beer brewing ultimately suffered from a lack of innovation and lagged behind technologically in comparison to more developed western countries. This would prove to be a major problem during the transition to a free market economy, as this technological obsolescence would sometimes spell doom for entire companies or individual brewery plants. At the same time, the events of 1989 onwards also allowed smaller companies and microbreweries to start popping up.

The privatization process in Czechoslovakia or any other former socialist country is a topic that could fill entire books. Suffice to say breweries suffered the same fate – or enjoyed a bright new future – just like all the other formerly nationalized businesses, with peculiar backroom deals and insinuations of corruption, but also genuine investments and subsequent resurgence. The vast majority of breweries were sold to various investors, with the biggest brands being bought by large brewing conglomerates like SAB, Heineken or later on Anheuser-Busch InBev.