| Abstract: |
This study analyses the recent development in brewing industry in Czech Republic, its effect on consumers and economic impact of beer-consumption on the society as a whole. Long-term trends show that optimal size of a brewery is either “very large” with at least nation-wide scope of production or “small” with strong focus on (geographically) local market. Rising concentration in the industry is found to be a consequence of natural competitive forces in the market; hypothesis that it is caused by strongest breweries, misusing their market-power, is being rejected. Both tangible and intangible costs of beer consumption to the society seem to outweigh production benefits. We found that in order to maximize the welfare of society government should take such measures, which would rice average beer price by from 7% to 72%, depending on our assumptions on behavior of beer abusers and non-abusers. |
