Czech fact of the day

by on January 28, 2013 at 7:36 am in Food and Drink | Permalink

At a typical local pub, a pint—500 milliliters, actually, in this metric-measuring country—costs about $1. A similar portion of water, juice or soda generally costs twice as much. Offering free tap water as at U.S. eateries is extremely rare.

At U Zelenku, a neighborhood institution for more than a century, for instance, a pint of the cheapest beer goes for 99 cents. The same size of soda water is $1.30. At the fancier Kolkovna restaurant in touristy Old Town, a pint is $2.50, while mineral water is $2.29, for a bottle less than half the size.

Here is more.  The Czech government may end up mandating that some non-alcoholic drinks be cheaper than beer.

For the pointer I thank Daniel Klein and also NB.

Rahul January 28, 2013 at 8:01 am

This might as well have been labelled German fact of the day.

average January 28, 2013 at 8:20 am

In Germany, it’s already mandated that the cheapest drink on the menu has to be non-alcoholic. Called “applejuice clause” (http://de.wikipedia.org/wiki/Apfelsaft-Paragraph in German).

Rahul January 28, 2013 at 9:27 am

Interesting. I didn’t know that.

Can they get away by putting the cheapest-beer-price on a tap filled glass of water? Does it even have to be the same quantity?

average January 28, 2013 at 12:08 pm

This being Germany, everything is covered: It has to be cheapest both in terms of one drink and per Liter. And it mustn’t be “outside the expected customer demand”, i.e. no warm goat milk as the cheapest drink. From personal observation, this works ok. Mineral water is usually cheapest. And no, Germans don’t drink tap water as a rule. ;-)

JVM January 28, 2013 at 3:05 pm

Is that true in convenience stores as well? In Berlin I remember convenience stores having Berliner Kindl for 1EUR, but bottled water being 1,50EUR.

Adrian Ratnapala January 28, 2013 at 9:00 am

Nonetheless, an Apfelschorle is often (typically?) more expensive than beer in Munich. But I you can get free water. And they are quite serious about their non-alcoholic beer here. The bit I find disturbing, is that at the supermarket, the beer is actually sold in the soft-drink aisle.

babar January 28, 2013 at 8:51 am

i wish i could get a good czech beer cheaply in nyc!

Michael January 28, 2013 at 9:31 am

Encountered a similar value/price scenario with wine right across northern Spain when walking the Camino de Santiago last year.

In the shops, a good bottle of local wine cost €1.50 – the same price as a litre and a half of water. This same value/price scenario transfers into the local restaurants where a set 3 course meal cost €8. That price included a bottle of wine or bottle of water! No discount given if you ‘only’ chose the water!!

Ended up sampling wine, for a song, of all the famous wine regions along ‘the way’ – Somontano, Navarra, Rioja etc. – right into Santiago! *Hic!*

Thor January 28, 2013 at 11:24 am

Sounds great! Here a decent bottle of Spanish red costs 15$ +

Alas.

Jan January 28, 2013 at 9:46 am

While most research has found that the Czech Republic has by far the world’s highest per capita consumption of beer, the country doesn’t have a particularly high rate of alcoholism or drink-related deaths. Those public health problems are more associated with countries whose drinking culture is dominated by high-octane spirits, like vodka. Here is one interesting study: http://jech.bmj.com/content/58/3/238.full.pdf

I don’t doubt that mandating some alcohol-free options be cheaper than beer could have some marginal public health impact, but drinkers gonna drink.

Rahul January 28, 2013 at 11:47 am

Maybe the Russians ought to require every Vodka selling bar to offer free beer.

Jan January 28, 2013 at 12:03 pm

Russians used to drink very little beer. It is now fairly common, but probably used as a chaser!

Rahul January 28, 2013 at 12:25 pm

I’d never have considered beer as an anti-alcoholism tool but in the Russian context it perhaps might work.

Andreas Moser January 28, 2013 at 10:31 am

And the girls!

Jan January 28, 2013 at 3:32 pm

E.g. Madeleine Albright (Born: Marie Jana Korbelová; Prague, Czechoslovakia)

Babe alert!!

Honza January 28, 2013 at 10:42 am

Yeah, I can confirm this. It’s even worse. At some restaurants they don’t even have still (bottled) water. The simplest drink you can get is carbonated water. But it’s slowly getting better in that respect although in most places you can’t even BUY tap water.

ladderff January 28, 2013 at 11:31 am

I just summarized this post to my little sister, who said that these prices don’t make sense: don’t you need about a pint of water to make a pint of beer? Little brat has me stumped.

John Schilling January 28, 2013 at 1:06 pm

Traditionally, the cheapest way to ensure that a pint of water doesn’t turn into a similar volume of foul and pestilent goop in a disturbingly short time, was to add a few percent alcohol. And it turns out there’s yeast that will do that for free, if you feed it some cheap grain in a warm, dark place. Bottom line, your problems don’t end with making your beverage of choice, you also have to store and transport it safely.

This shouldn’t be a problem in any modern industrialized country. But, as has been noted, some populations just plain don’t drink tap water. Either they live in places which really are having unusual difficulty providing safe, potable water, or there is a gross mismatch between perception and reality. It would not terribly surprise me that mass-market brewing and bottling might sometimes be cheaper than A: providing reliably purified and sterilized still water and B: conducting the PR or advertising campaign that convinces people it really is pure and sterilized.

Hasdrubal January 28, 2013 at 1:19 pm

I’ve long wondered about that myself.

The cost of water is likely the same (unless the bottled water company _actually is_ using glacier water harvested by undergrad ecology majors with disabilities from disadvantaged census tracts on scholarships from Greenpeace.)

The cost of bottling and delivery could be the same, higher for breweries if they’re using glass and water is using plastic, or much lower for breweries if we’re talking about kegs verses bottles.

That leaves the cost of other inputs and processing, and taxes. If we are comparing draft beer to bottled water, I could see the cost of bottling and shipping outweighing the cost of hops and fermentation tanks. Otherwise, I’m wondering if the beer market is more competetive, driving price closer to marginal cost than the water market. (That’s almost certainly the case in the US when bottled water first got big, it was a luxury good. In a country where bottled water is the norm, I don’t know.) And/or, there are some other market distortions that don’t show up in this story. (Again, using the US as an example, taxes and the structure of the distribution system have a huge impact on the price of beer.)

Good question, I don’t know the answer. I’d really, really like to get a better understanding of the costs of producing beer, pop, and bottled water are, though.

mu January 28, 2013 at 3:56 pm

Inventory cost perhaps? Beer may have much better turnaround times.

BC January 28, 2013 at 10:07 pm

I would think that in the US, alcohol taxes, regulations, and limits on liquor licenses have a significant impact on beer prices. I don’t know whether these elements are less significant in Germany and Czech Republic.

Marian Kechlibar January 29, 2013 at 7:04 am

There are ethanol-content based taxes in the Czech Republic, but they do not have massive impact on the price of beer.

Beer is the most popular drink here, and any government that would be foolish enough to drive prices of beer significantly up would face street revolts, if not outright revolution. Even the Bolsheviks were careful about their pricing schemes, when it came to beer.

(Full disclosure: a non-drinker of beer, just wine, thanks).

Honza January 29, 2013 at 8:26 am

Liquor licenses don’t exist here. At least not in the form they exist in the U.S. You will find a huge sortiment of alcohol at any supermarket, grocery store or gas station. You can get a can of beer at McDonald’s (at least that was the case when I worked there a couple of years ago). And even my favorite stationery sells wine. It wasn’t a problem for me and my class mates to buy considerable amounts of cheap wine and beer for our school trip when we were 14 or 15 (large supermarket chains will ask for an ID if you look TOO young but local grocers are more than happy to make extra profit from underage drinking). And I should also mention the ingenious entrepreneur who opened a pub right behind our school (high school) just in time for some of my classmates to skip the boring classes on fridays and spend the day in the pub. No questions asked.

Honza January 29, 2013 at 7:54 am

My opinion is that bottled water (plastic or glass) is overrated and overpriced. More so if it’s a “top” brand.

Adam January 29, 2013 at 5:12 pm

I think you had the right answer when you said kegs. Isn’t this a tap beer vs. bottled water comparison?

Matt January 28, 2013 at 11:40 am

When I lived in Russia (late 90’s/early 2000’s) it was similar there. A bottle of (pretty good, really) Baltica Beer cost about 10RR, or about 40 cents at the time. Pepsi cost about 15RR, as did water. Some other more local beers, still not too bad, could cost as little as 8RR. (A drinkable bottle of vodka cost about 50RR, or a bit less than $2. This turns out to be a problem.)

ahow628 January 28, 2013 at 1:53 pm

My wife and I were in Prague for our honeymoon back in 2007. We were about 2 weeks into our trip at that point and were in the mood for something non-alcoholic at that point (lots of beer and wine up till then). I ended up getting beer anyway because it was 25% less in price and twice as much in volume as the orange Fanta my wife got. A 4-pack of half liter cans of Staropremen were about $4 at the time, so not much difference to buy retail or in a restaurant.

liberalarts January 28, 2013 at 2:32 pm

I bet that the beer drinkers are more likely to buy multiple drinks, so that the restaurants end up with better revenues with that pricing model. If the price of soda water is cut to 50 cents, then they will still only drink one, whereas beer drinkers might be more elastic in their demand.

axa January 28, 2013 at 3:39 pm

winner!!! cause you’re not going to drink just one beer. at least 3 =)

Doug M January 28, 2013 at 6:31 pm

I have been to cafes in Paris where the wine is cheaper than the water, which seems to make Jesus’ miracle at the Wedding at Canna less significant.

Tarrou January 28, 2013 at 8:09 pm

A solution in search of a problem, if you ask me. No idea that beer consumption is any problem, no public health issues, no data on related crime or disease, let’s just mandate price controls on beverages because those are always such a good idea? On an Economics blog, no one is disturbed by that prospect?

Marian Kechlibar January 29, 2013 at 7:18 am

To be fair, there is some problem with underage drinking here in Czechia, and some part of the problem is that non-alcoholic drinks are usually priced well above beer.

In my student years, quite a few colleagues would drink beer to quench their thirst (e.g. on a trip to countryside), because their monthly income wouldn’t allow them anything else. Asking for tap water was a complete taboo and you would almost certainly be kicked out of the pub for such a request back then (this is slowly changing).

Nevertheless, the reaction comes too late. These days, the gap between beer and cheaper non-alcoholic drinks has already shrunk, especially due to proliferation of some local cheap soft drinks (e.g. Kofola). So the government reacts once more with delay of a kicked dinosaur.

Adam January 29, 2013 at 5:17 pm

Last time I was there, I would have largely been drinking beer. But the first time I was there I was about 16 in the early 1990s and I’m fairly sure my mother and I regularly got tap water (because that’s what we always did).

Maybe that was just in tourist areas or something, but I don’t recall it being a problem.

Except for the one time I tried to order a Coke in Český Krumlov and got some sort of warm booze-containing drink instead.

Richard Mason January 28, 2013 at 11:00 pm

I remember a similar experience as a tourist in Poland (2008): beer was served in pint glasses and every other kind of drink was served in tiny shot glasses.

Beer may or may not have been the cheapest drink per serving, but given the discrepancy in serving sizes, it was surely the cheapest drink by volume.

It also seemed like the only practical option for an American accustomed to drinking a non-trivial volume of liquid with a reasonable number of waiter appearances.

Tim Worstall January 29, 2013 at 9:16 am

Reporting in from North Bohemia, from Usti nad Labem.

At the good local bar, where all the hot chicks go, Pilsener Urquell is 35 Ks (hmm, $1.50) per half litre. At the backstreet bar another local beer is 22 Ks.

Forgive me, but even after several months of on/off working here I still don’t know what a soft drink costs in a bar.

Adam January 29, 2013 at 5:08 pm

This isn’t actually particularly unusual for Europe. Perhaps not in the British Isles, but elsewhere in Europe it’s not at all unusual for soda to cost more than the beer, and even more so on a per unit basis.

As for free water not being available, to my recollection, that isn’t true. But you might need to know how to ask for it.

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