Proceedings from IX. International Conference on Applied Business Research ICABR 2014

October 6 – October 10, 2014

In Talca, Chile

www.icabr.com

Organised by:

Mendel University in Brno -

Universidad Catolica del Maule - Chile

Slovak University of Agriculture in - Slovak Republic

and Kasetsart University - Thailand

Publisher: Mendel University in Brno, Zemedelska 1, 613 00 Brno, Czech Republic Title: Proceedings from IX International Conference on Applied Business Research ICABR 2014

All papers published in this proceedings have been peer reviewed

ISBN 978-80-7509-223-6 Published 2015

CONTENTS: Alvarez Von Bennewitz Eduardo, Diaz Quinones Ximena, Bravo Hernandez Juan Pablo, Madariga Moaya Victor Manuel / “Vitrina Campesina”: Contribution of ICT to rural development in the Maule Region, Chile ...... 7 Bajusova Zuzana, Zentkova Iveta, Findura Pavol / The area of oilseed rape needed in cultivation conditions of Slovak republic by the variable percentage of FAME in diesel ...... 14 Becvarova Vera, Zdrahal Ivo / Agriculture production of member states in the context of development of the EU common market ...... 25 Bittner Patrik, Pomazalova Nataša / Assessment of the satisfactory level of education in the individual municipalities ...... 31 Blazkova Ivana / The effect of the enterprises’ size structure development on the food industry performance – example of the Czech beverages sector ...... 37 Borja Oscar Rodrigo Pessoa, Caldas Ricardo Wahrendorf / Risk Society, Environmental Hazardous and Social Capital ...... 45 Braha Kushtrim, Qineti Artan, Rajcaniova Miroslava / Evidence of the food security risk in the case of Kosovo ...... 54 Caputa Wieslawa, Skorecova Emilia / Customer value estimation in the channels of value distribution on the example of brewing industry ...... 64 Cenek Jiri, Horak Miroslav / Czech citizens in Zambia: Preliminary research on the process of adaptation ...... 70 Ciaian Pavel, Nurmetov Kudrat, Pokrivcak Jan, Pulatov Alim / Water use and sustainability of agriculture in Uzbekistan ...... 83 Corejova Andrea, Jarosova Jana / Database as an Object of Intellectual Property: Company and University Perspective ...... 104 Corejova Tatiana, Rostasova Maria / Regional Development, Innovation and Creativity ..... 114 Cupak Andrej, Pokrivcak Jan, Rizov Marian, Alexandri Cecilia, Luca Lucian / Food Demand in Romania: Estimating an Almost Ideal Demand System ...... 128 Czegledi Csilla, Juhasz Timea /Entrants’ success factors on labour market from the aspect of employers ...... 145 Darkwah Antwi Samuel, Minařík Bohumil, Verter Nahanga / Human Development in the ECOWAS Member States in the Period from 1994-2012 ...... 153 Dobak Dusan, Serences Roman, Svoradova Lucia, Holubek Ivan / Wheat production in the Slovak republic with relevance to production technologies, external environment factors and economic conditions ...... 161 Dufek Jaroslav, Somerlikova Kristina, Sapakova Eva / The education development of population and its effect on the unemployment level in the EU ...... 175 Dvorakova Sarka, Palat Milan / Cooperation as a competitive advantage: Public private partnership in R&D ...... 186 Fajkus Martin / IT-supported teaching of Microeconomics ...... 195 Ferenczi Vanova Alexandra, Hornyak Greganova Radomira, Varyova Ivana, Kosovska Iveta / Analysis of motivation factors of students in a selected subject at the Faculty of Economics and Management, Slovak University of Agriculture in Nitra ...... 202 Fortini J., Lopez J.L., Villa A., Caldazilla J. /Social Capital as a Measure of Performance for regional Development Projects ...... 212 Gurcik Lubomir, Porhajas Viktor, Gurcikova Katarina / Indebtedness and prosperity determinants of agricultural companies in ...... 231

Hallova Marcela, Hennyeyova Klara / Solving the Economic Models by Using the Tools of Excel and VBA Language ...... 243 Hamza Pavel, Schneider Jiri / Drinking Water in the Amathole District, Republic of South Africa ...... 249 Heczkova Marketa / Multicriterial macroeconomic evaluation of Chinese and Japanese economic levels in connection to resolving their territorial dispute ...... 259 Holubek Ivan, Serences Roman / Production, quality and cost ratio of meadow´s hay production ...... 272 Horska Elena, Mehl Horst, Bercik Jakub / Review of Classical and Neuroscience Insights on Visual Merchandising Elements and Store Atmosphere ...... 284 Hrabalek Martin, Pavlik Ivo / Serious infectious diseases of humans and animals in Nicaragua ...... 293 Hrabalek Martin, Sasinkova Iva / European Union and Latin America: A European Perspective ...... 302 Hubelova Dana, Machalkova Katerina /Selected characteristics of personal capital as a determinant of human capital ...... 309 Hurnakova Jaroslava, Bartova Lubica, Fandel Peter / Investment Support and Farm Performance in the Slovak Republic ...... 316 Chalupova Martina, Prokop Martin / “Regional Labels In Vysocina Region – Do Consumers See Differences?” ...... 327 Chuaybamrung Lanlalit, Leeamornsiri Nantawut, Sudharatna Yuraporn / The effect of learning organization on organizational performance: a case study of Toyota Motor Thailand Co., Ltd...... 338 Jadczakova Veronika, Cermakova Denisa / Analysis of Tourism in Selected Latin America Countries ...... 354 Janalova Karolina, Schneider Jiri, Immerzeel H. M. Willem / Economic, Social and Ecological Strengthening of the District of Ccapi, Cusco Region, Peru ...... 362 Kajanova Jana / Performance Analysis in SMEs through the Usage of Accounting Information Systems ...... 372 Kapsdorferova Zuzana, Filo Michal, Kadlecikova Maria / The Enablers and Drivers for Sustainable Rural Development and Income Diversification in New European Union Countries ...... 381 Kasparova Katerina, Svoboda Roman / Private Universities and Education of Their Graduates for Companies in the CR ...... 389 Kasprikova Nikola, Klufa Jindrich / On association of Internet usage in country and learning outcomes test scores ...... 396 Kazmierczyk Jerzy / How do banks really recruit job candidates? “The Sieve Model” in the context of recruitment and dismissal strategies in banks in Poland A new tool to measure it - the Integrated Sieve Model Index ...... 404 Kimbara Tatsuo, Murakami Kazuma, Tapachai Nirundon / Environmental Management Transfer and Environmental Performance by Japanese Firms in Thailand ...... 415 Klimsza Lucjan, Lokaj Ales / The Global Culture and Economical Values: The Corporation Responsibility in the Fragmentary Global Culture ...... 426 Konecny Ondrej / Factors of Development of Agriculture on the Farm Level: Case study from the Czech Republic ...... 436 Kongthong Lalita, Sudharatna Yuraporn, Apinuyopas Preeyanuch / Marketing Factors Affecting Fresh Coffee Buying Decision ...... 444

Konyova Veronika, Bartova Lubica / Regional Economy Specialisation and Industry Concentration in the Slovak Republic ...... 459 Kopeckova Martina / PMI versus IPMA: use of standards in the business practice ...... 468 Kosiciarova Ingrida, Nagyova Ludmila / Private label: the chance how to increase the consumer´s interest in a proper retail chain131F ...... 482 Kozakova Jana / Organic Farming in Slovakia: Twenty Years of Progress and Development ...... 498 Krajcirova Renata, Ferenczi-Vaňová Alexandra / Merger control transactions and implementation of Merger Regulation and European Union Merger Directive into the Slovak legal and tax legislation ...... 509 Kral Bohumil, Soljakova Libuse / Professional competence of controllers in the Czech Republic: Research Empirical Study ...... 515 Kucera Milan, Lateckova Anna / Management information systems in the process of globalization ...... 531 Labra Lillo Romilio, Alvarez Isabel, Rock Antonio Juan / Identifying the keys of growth in natural resource-driven countries in the knowledge economy ...... 538 Lajdova Zuzana, Bielik Peter, Turcekova Natalia /NewEvidence of Price Transmission: The Case of Edam Cheese ...... 559 Lancaric Drahoslav, Kozakova Jana, Toth Marian, Savov Radovan / Comparison of Production factors in Organic and Conventional Farming in Slovakia ...... 569 Lateckova Anna, Stuchly Peter, Galisova Veronika / Improving process management by identifying excessive costs ...... 582 Lazikova Jarmila, Bartova Lubica, Bandlerova Anna /Agricultural Marketing Cooperatives in the Slovak Republic. A case study ...... 588 Lee Veronica / An Empirical Analysis on Users’ Usage Intention of Enterprise Smart Application Influencing Users’ Job Performance ...... 600 Lopez J.L., Villa A., Caldazilla J. / Framework for Food Security Analysis at national Level 609 Lorencova Helena, Slezackova Tereza, Schneider Jiri / Profile of visitors to the Moravian Karst PLA as a basis for solving visitors’ impacts on nature protection ...... 621 Machal Pavel / Professional project management as a prerequisite for effective management of regional projects ...... 631 Malatinec Tomas, Marisova Eleonora, Fandel Peter /State Administration Efficiency in the Field of Trade Licensing – case of Slovakia ...... 635 Matusinska Katerina, Klepek Martin / The Product Policy Perception by the Specific Segment “Singles” in the Czech Republic ...... 654 Matysik-Pejas Renata, Krasnodebski Andrzej, Satola Lukasz / Regional diversification of innovation activity of food industry in Poland ...... 663 Melo Daniel, Moravcikova Kamila / Interconnections of Regional Disparities between Innovation and Agricultural Productivity and Development within Slovak Regions ...... 674 Mishra Kumar Ashok, Tapachai Nirundon, Punpugdee Nuttapon / Business Start-up Motivation of Indian Entrepreneurs in Bangkok, Thailand...... 684 Miskolci Simona / Perceived Embeddedness by Shoppers at Farmers’ Markets in the Czech Republic ...... 692 Moravcikova Danka, Adamickova Izabela / Innovation as a key factor in sustainable rural and agricultural development168F ...... 701 Mravcova Anna / The issue of global citizenship and the ways of its implementation into the educational process at the universities in the preparation of future economists ...... 718

Nambuge Dimuth, Bielik Peter / Driving growth and employment through business clusters- in the case of Slovakia ...... 730 Nurmetov Kudrat, Pokrivcak Jan, Ciaian Pavel, Pulatov Alim / Rural reforms and agricultural productivity growth in Uzbekistan183F ...... 741 Palat Milan / Modelling of natural water retention using stepwise regression in the catchment basin of a river ...... 763 Palat Milan / Turkey’s integration prospects into European structures and Turkish immigration ...... 769 Palkechova Lucia, Svoradova Lucia, Viragh Roderik / Analysis of Vacation Behaviour in Rural Tourism and Agrotourism in the Slovak Republic Conditions ...... 782 Palkovic Jozef, Ulicna Martina, Sojkova Zlata / Efficiency of agriculture in European FADN regions ...... 793 Papcunova Viera, Hornyak-Greganova Radomira, Orszaghova Dana / Evaluating of the financial management of the municipalities via parameters of data matrix in the Slovak Republic conditions ...... 803 Pavlakova Stanislava, Zentkova Iveta / Competitiveness of Pig farming on the Level of primary Production of Slaughter Animals in the Slovak Republic ...... 815 Pavlik Ivo, Niebauerova Daniela / Bovine tuberculosis in cattle in Central American continental countries during the years 2003-2012 ...... 825 Peinador Dan, Alberola Ramon Jose, Lopez Luis Jose, Mariottoni Alberto Carlos / TURSALUD: Health & Tourism in a BOX ...... 832 Piorkowska Katatrzyna, Stanczyk Sylwia / Methodology of researching organizational routines206F ...... 841 Piterkova Andrea, Toth Marian, Serences Peter / The Impact of Non-financial factors on Prosperity of Slovak agriculture sector ...... 851 Pomazalova Natasa, Horackova Eva / Utilisation of social innovations in small and medium enterprises ...... 861 Popelka Vladimir, Neomani Juraj / Implementation of cloud computing into the dairy enterprise in Slovakia ...... 868 Presova Radmila / Adams' theory on equity between costs and benefits ...... 878 Rasovska Adriana / The Reflexion of the Common Agricultural Policy’s reform on Agriculture in Slovakia ...... 886 Rehor Petr / Internal managerial communication process in small and medium sized businesses ...... 903 Repisky Jozef, Letko Anton / Evaluation investment of electricity generation and heat with exploitation biomass ...... 909 Richterova Lucia, Hoskova Elena, Zentkova Iveta / Trends in development of youth unemployment in the Slovak Republic ...... 919 Rybansky Lubomir, Lancaric Drahoslav, Maros MIlan / Selected Factors Influencing Enterprise Planning Horizonts:Evidence from Slovakia...... 928 Sajbidorova Maria, Lusnakova Zuzana, Hrda Veronika / Application of time management key principles at managers´ work ...... 937 Satola Lukasz, Matysik-Pejas Renata, Krasnodebski Andrzej / The diversification of municipal infrastructure in Poland...... 948 Sapakova Eva, Svobodova Zuzana, Sefrova Hana, Hasikova Lea / Infestation by Aceria tulipae (Keifer) (Acari:Eriophyidae),Economy and Marketing of Growing Garlic in Regional Agricultural Areas ...... 958

Savov Radovan, Toth Marian, Lancaric Drahoslav, Pokrivcak Jan / Selected Economic and Managerial Aspects of Production in Slovakia with Focus on Microbreweries ...... 969 Seben Zatkova Timea / The new VET Professionals - Entrepreneurship Trainers for VET ... 977 Serences Peter, Toth Marian, Rabek Tomas, Cierna Zuzana, Rasovska Adriana / Subsidies and profitability of Slovak farms236F ...... 989 Severova Lucie, Svoboda Roman / Competition of Companies in International Tourism Sector in the Czech Republic ...... 998 Schneider Jiri, Vyskot Ilja, Lorencova Helena, Lampartova Ivana / A background of forests functions as a part of ecosystem services systems ...... 1015 Skoludova Jana / The enterprise social network: a psycho-social approach to human resource management? ...... 1024 Smolik Josef / Global terrorism: its causes and consequences ...... 1033 Sobrinho de Morais Neto Arnaldo / Brazilian consumer protection in the international ecommerce and gaps in the legal system ...... 1044 Sojkova Zlata, Citaryova Eva, Palkovic Jozef / Competitiveness of regions based on comparative advantage ...... 1055 Somerlikova Kristina, Vykoukalova Zdenka, Kesidisova Alexandra / Analysis of Taiwanese population and its age structure ...... 1064 Sredl Karel, Mikhalkina Ekaterina, Kopecka Lenka / Lifelong Learning and Its Impact on Job Position of Workers in Firms ...... 1073 Svatosova Veronika / The Proposal of Process Model for Strategic Management in Electronic Commerce ...... 1079 Svoboda Roman, Severova Lucie /Education of Qualified Workers for Companies in the Czech Economy ...... 1090 Svobodova Zuzana / Business Valuation of Telefónica Czech Republic, a.s...... 1096 Tamas Vojtech / The changing position of EU canola producers on the global market ...... 1105 Taterova Eva, Valka Ivo / New Cleavages in post-apartheid South Africa ...... 1110 Tvrdon Michal / Beveridge Curve as an Indicator of Labour Market Performance ...... 1119 Ubreziova Iveta, Hotzinger Franz Felix / Internationalization of small and medium sized enterprises in selected regions of Germany ...... 1127 Vargova Ivana, Purma Marcel, Pokrivcak Jan / The development of macronutrient consumption and the impact of macroeconomics indicators on their consumption in years 2004 - 2011 in the Slovak republic ...... 1140 Verter Nahanga, Horak Miroslav, Darkwah Antwi Samuel / UN Millennium Development Goals and Social Development in Nigeria ...... 1151 Wongavanakit Ploy, Sookumarn Suparerk, Apibunyopas Preeyanuch / Business Model of private tutoring for Armed Forces Academics Preparatory School (AFAPS) entrance ...... 1163 Zahorec Jan, Hallova Marcela / Innovations of Professional Training in the Field of Informatics of Non-informatics Study Profiling ...... 1179 Zdrahal Ivo, Dudova Barbora, Becvarova Vera / Development of the Czech dairy industry after entrance into the European Union ...... 1190 Zeithamer R. Tomas /Methodology of Theoretical Physics in Economics: The Principle of Correspondence between Economic Variables and Kinematic Variables of Nonrelativistic Mechanics ...... 1190 Zentkova Iveta, Hoskova Elena / Income Inequality in the Slovak Republic ...... 1207 Zivelova Iva / Investments into education in the Czech Republic...... 1215

Selected Economic and Managerial Aspects of Beer Production in Slovakia with Focus on Microbreweries

1 Radovan SAVOV231F 2 Marián TÓTH232F 3 Drahoslav LANČARIČ233F 4 Ján POKRIVČÁK234F

Abstract Paper is oriented on evaluation of brewing industry focused on market, consumption and production changes and their economic impact on value added, employment and government revenues. Ambition of this paper is to show trends in development of beer industry in Slovakia, which leads to establish new microbreweries. Paper is focused on the importance of beer contribution to the economy of Slovakia. Increasing of beer leads to higher value added, helps to make more opportunity for jobs and leads to higher government revenues. Slovak brewing industry has changed in last decades. Market is characterized by higher concentration as a result of globalisation. More than 80% of consumption in Slovakia comes from 2 large international companies – Heineken Slovakia (owned by Heineken Corporation) and Pivovary Topvar (owned by SAB Corporation). Microbreweries cover only about 4% of the total market share. Beer consumption was on level 94 litres per capita (annually) in 2002 but strongly has fallen to the level 73 in 2011. In years 2012 and 2013 small increasing was achieved to level 75 litres. New innovative methods and formulas (like Radlers, no-alcoholic , premium beers) helped to stop decreasing of beer production. Beer production could have positive impact on economic development of the country. Value added was on level 222 millions Euros in 2012 and increased by 16.2% compared to year 2010 because of higher total volume of production. In total, the employment impact from the production and sale of was 19612 jobs in 2012 what is 6.5% increasing compared to year 2010. Results are based on data of The Brewers of Europe and Slovak Beer and Malt Association. To recognize more motives for establishing microbreweries the interviews were held with founders of Slovak microbreweries.

Keywords: Beer production, beer consumption, microbreweries, value added, employment, tax revenues.

1 Slovak University of Agriculture, Faculty of Economics and Management, Tr. A. Hlinku 2, 949 76 Nitra, Department of Management, email: [email protected] 2 Slovak University of Agriculture, Faculty of Economics and Management, Tr. A. Hlinku 2, 949 76 Nitra, Department of Finance, email: [email protected] 3 Slovak University of Agriculture, Faculty of Economics and Management, Tr. A. Hlinku 2, 949 76 Nitra, Department of Management, email: drahoslav.lancarič@uniag.sk 4 Slovak University of Agriculture, Faculty of Economics and Management, Tr. A. Hlinku 2, 949 76 Nitra, Department of Economics, e-mail: [email protected]

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Introduction The production of beer in Slovakia has a long history dating back to 8th century. The oldest brewery is situated in Vyhne. The first association of beer producers was established in 1450 in , a town in Eastern Slovakia. In middle age the beer was produced almost in every town and village. This changed in 19th century when due to the so-called beer tax, a lot of towns ceased to produce beer. In Slovakia there were 40 breweries at the beginning of 20th century, mostly microbreweries. They all faced two significant disadvantages – the necessity to import basic ingredients as well as strong competition from Czech Republic and Hungary. After World War II the private breweries were transformed into three companies fully owned by state. The rising beer consumption allowed establishing other breweries (Topoľčany, Hurbanovo) in 1960s. Nowadays the globalization is strongly influencing the companies and the beer market. Old traditional breweries companies finished their activities and were acquired or closed by multinational brewing companies. The biggest breweries like Corgoň, Zlatý Bažant, Martiner and Gemer were bought by Heineken Corporation and Šariš, Topvar were bought by South African Breweries Corporation. Other smaller breweries like Stein, Steiger, Popper tried to be as a competitors (only with Slovak capital) on market for few years. But they were not to be able to compete with large corporations and then stopped business or founded new partners abroad. Therefore the market is characterized by higher concentration. More than 80% of consumption in Slovakia comes from 2 large international companies – Heineken Slovakia (owned by Heineken Corporation) and Pivovary Topvar (owned by SAB Corporation). The microbreweries cover only about 4% of the total market share. Microbreweries build own brands with specific taste. They try to compensate high costs for high prices. In 2008 there were only 6 active microbreweries produced own brands but nowadays there are at least 33 microbreweries operating in this business. In spite of the crisis people demand high quality beer with specific taste (mostly with higher price) more than beer produced by big international companies (called “Eurobeer”). It is also one of the reasons why people spent more money on beer market. In 2008 total consumer spending was 585 million Euros but in 2012 it was more than 620 million Euro what means 6% increasing. However, there are more significant changes of the brewing industry (apart from the establishing of microbreweries). Firstly, beer consumption decreased and nowadays shows stagnation. Beer consumption was on level 94 (annually) in 2002 but has strongly fallen to 73 litres per capita in 2011. In years 2012 and 2013 small increasing was achieved to level 75 litres. Total consumption decreased by 15% in year 2012 compared to year 2003 and it is on level 4.1 million hectolitres. Fall of consumption was caused because of higher preference of substitutes (wine consumption increased by 9.7% in 2012 compared year 2008) and trends of healthy living style (water consumption increased a lot). Secondly, some technological changes in the beer production occurred. New innovative methods and formulas (like Radlers, no-alcoholic beers, premium beers) helped to stop decreasing of beer production. Beer production deeply reduced in by 34% in Slovakia in year 2010 compared to 2003 but in next 2 years we can see 3% increasing. Thirdly, beer production could have positive impact on economic development of the country. It helps to create higher value added. Value added was on level 222 millions Euros in 2012 and increased by 16.2% compared to year 2010 because of higher total volume of production. In it was 3.11 million hectolitres in 2010 and 3.21 in 2012 what means 61 Euros value added per hectolitre in 2010 was increased to 69 Euros in 2012). Higher beer production in 2012 increased also number of jobs opportunities (direct in brewing companies and indirect in retail, hospitality and supply sector) connected to beer production. In total, the employment impact from the production and sale of beer in Slovakia was 19612 jobs in 2012 what is 6.5% increasing compared to year 2010. Total government revenues (consist of excise duties, VAT and income tax) increased by 8.1% in year 2012 (total government revenues were on level 228 million Euro) compared to year 2010 (total government revenues were on level 211 million Euro) when the beer production was lower by 3%. We can conclude that higher beer production in last years has positive impact on economy through value added, employment and government revenues.

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The world beer market is also characterized by big concentration and globalization. Between 1950 and 2000 the four-firm producer-concentration ratio for beer increased from 22 to 95 in the United States and biggest player on the market reached more than 50%. In Germany, concentration has risen, but the four-firm concentration ratio was smaller in 2000 (about 29%) than one-firm ratio in United States (Adams, W. J., 2011). Expansion of brewing companies happens mostly through mergers and acquisition and brewing licences for in- country production of foreign beers than actual trade of beer (Colen, L. & Swinnen, J. 2011). Also in beer countries we can see that beer consumption declines. Alternative alcoholic drinks, in particular wine, became more readily available in traditional beer countries. Consumption of beer declined with consumers switching to other beverages because of increased choice and higher incomes. The growing domination of increasingly standardized beer produced by fewer brewing companies has led to a counter-movement. People started to show a renewed interest in specialty beers (like porter, pale ales, bitters and stout) (Poelmans, E. & Swinnen, J. 2011). It is a reason why new microbreweries were founded on the region basis. Foundation of microbreweries is obviously striking in countries called “Beer drinking nations” like Germany, Belgium, Czech Republic and Britain (Colen, L. & Swinnen, J. 2011). The evolution of microbreweries has been accompanied by an expansion in the import sector as well. Microbreweries are small in size and produce beer that is more in keeping with the brewing traditions of Europe and comes in a variety of styles (Tremblay, C. H. & Tremblay, V. J. 2011). The results are based on data from The Brewers of Europe and Slovak Beer and Malt Association. To recognize more incentives for establishing microbreweries the interviews with founders of Slovak microbreweries were held. Method of linear trend of production development was used.

Beer production and consumption development in Slovakia, price and consumers spending The brewing industry has changed a lot in many areas in last years. Firstly, beer production highly decreased and shows stagnation nowadays (see picture 1). Total production of beer in Slovakia was more than 4.6 million hectolitres in 2003, decreased by 33% in 2010 and than slowly increased to the level 3.2 million hectolitres in 2012. The curve of beer consumption has similar trend as beer production. Total beer consumption reached level 4.8 million hectolitres in 2003 and then had fallen by 26% in 2010. After this period we registered small increasing to the level 4.1 million hectolitres in 2012. As we can see in each year beer consumption in Slovakia is higher than domestic production because of big import of foreign brands of beer. Consumption of beer per capita is good indicator for countries comparison. In years 2000- 2006 Slovakia belonged to the top 15 countries with highest beer consumption per capita in the world. In Slovakia this indicator has fallen by 13.3% in whole searched period. Main reasons of this fall are connected with higher price of beer (because VAT increased), with healthier life style (consumers started to prefer water and mineral water) and preferences of consumers (people started to prefer wine than beer – wine consumption increased by 10% in last years). As we can see in table 1 there is continuously falling until 2011. Boost of the consumption in 2012 was caused by the introduction of innovative products such as mixed beer drinks (called Radlers).

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Beer production in Slovakia (1000 hl) Beer consumption in Slovakia (1000 hl)

Pic. 1 Beer production and consumption development in Slovakia (Source: The brewers of Europe. Beer statistics 2012)

In observed period (2003-2012) beer production and consumption trends are falling. Beer production is characterized by linear equation y = -162.52x + 4552.9 and beer consumption is characterized by linear equation y = -86.212x + 4698.3. Difference between these trends escalates and it should create opportunity for new entities on beer market. People wanted to have other possibilities of quality beer as an alternative to Eurobeers produced by multinational corporations in Slovakia. It is a main reason why some businessmen started to brew own beers in pubs and created own microbreweries.

Tab. 1 Consumption of beer (per capita) in Slovakia 2003 2004 2005 2006 2007 Index Consumption per capita (l) 90 82,4 80 80,7 79,3 12/03 2008 2009 2010 2011 2012 86,7% Consumption per capita (l) 77,4 75 78 72,9 78 (Source: The brewers of Europe. Beer statistics 2012)

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y = -86,212x + 4698,3 4000

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Lineárny (Beer consumption in Slovakia (1000 hl)) Lineárny (Beer production in Slovakia (1000 hl))

Pic. 2 Beer production and consumption trends in Slovakia (Source: Own proceeding)

Price of beer is important indicator of the market. There is a big difference between on trade and off trade price of beer. Average consumer price per 1 litre on trade increased by 13%, but off trade price decreased by 3.6% in last years. There are two main factors caused higher price in on trade. The first is raw materials prices increasing and the second is high level of excise duty ratio. It is one of some reasons that influenced structure of consumption into 40% on trade : 60% off trade. People changed preferences and buy beer more often in supermarkets than before. Using of PET bottles grew a lot and this could be an indicator of higher consumer convenience.

Tab. 2 Price of beer and consumer spending Index 2008 2009 2010 2011 2012 12/08 total consumer spending (in million Euro) 585 599 606 674 620 105,98% average consumer price in on-trade (1 l, including taxes, in Euro) 1,82 1,9 2,1 2 2,06 113,19% average consumer price in off-trade (1 l, including taxes, in Euro) 1,12 1,2 1,4 1,06 1,08 96,43% (Source: The contribution made by beer to the European economy)

Import and export of beer in Slovakia Although Slovakia was known as a country of quality beer, import of foreign beer is much higher than volume of exported beer. Slovakian brands are mostly exported to V4 countries, but also to Romania, Austria, Germany and Russia. Import of foreign beer increased by 85% in searched period and reached the volume 0.65 million hectolitres. On the other size export of beer also increased very slowly by 24% to the level of 0.164 million hectolitres. Balance gap between export and import increased by 124%. We assume that it is also the reason of customer preferences because they prefer quality beer.

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Pic. 3 Import and export of beer in Slovakia (Source: The brewers of Europe. Beer statistics 2012)

Microbreweries in Slovakia There are more than 30 breweries operating in sector nowadays. Since 2008, the total number increased by 130%. The main reason for this escalation is was opportunity for entities to enter the market and open new small breweries or brew pubs. Number of microbreweries was 7 in 2008. During next five years other 19 microbreweries were established, usually on the place where there was the beer brewed in the past and therefore the tradition of breweing existed. New breweries operate now f.e. in Nitra (Trogar), Martin (Victoria), (Sessler), Banská Bystrica (Perla), Stupava (Stupavar), Prievaly (Sandorf), (Richtar Jakub, Mestiansky pivovar), Košice (Golem). There is also still opportunity for other new microbreweries because demand for premium and specialty beer became stronger and mainly microbreweries can focus on quality and specialties.

Tab. 3 Numbers of breweries in Slovakia Index 2008 2009 2010 2011 2012 12/08 Breweries (including microbreweries) 13 15 19 25 30 230,8% Microbreweries 7 9 14 20 26 371,4% (Source: The Slovak Beer and Malt Association)

There was an association of small independent Slovak breweries (ASISB) founded in 2009. It was founded by 4 independent Slovak breweries: Banskobystrický Brewery, Kaltenecker Brewery (Rožňava), Golem Brewery, (Košice) and Perla Brewery (Banská Bystrica). Until 2014 the ASIB was joined by another 11 independent breweries. Growing in power the ASIB is recognized by the legal authorities. It is nowadays being invited to discuss the prepared legislative acts connected to beer production and its taxation. The ASISB`s agenda is to achieve the reworking of actual tax system (lower or no taxes for homebrewers; more tax level according to production etc.). In 2012 the ASISB started the initiative „Beer Militia“. The initiative is built upon five principles:

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1. The initiative is opened for every microbrewery willing to take part (upon condition of its independence on international capital). 2. The “protected” beers should be produced by traditional technologies using the finest natural ingredients. 3. The main objective is to achieve fair market conditions and bigger tax differentiation for small independent Slovak breweries. 4. The initiative protects Slovak breweries which were able to remain independent and which saved their own identity. 5. The initiative welcomes in its ranks any organisation who genuinely cares for the one hundred percent Slovak beer. The initiative actually associates 16 microbreweries and brewpubs. The founders expect the number to be rising in the near future. The dynamics of microbreweries foundation is very positive with 3-5 new breweries founded every year. There are expectations the number of microbreweries will reach 60-80 in 2020.

Importance of beer production for economy of Slovakia There are many reasons why Slovak economy is influenced by beer production. Firstly, beer sector is helps to create jobs opportunities directly and also indirectly in retail, hospitality and supply sector. Secondly, beer production has positive impact on value added and government revenues. Thirdly, new microbreweries offering services such a beer spa or beer excursion can spread tourist interest of some region. As shown in table 4 decreasing of beer production led to the biggest decreasing of jobs opportunities (directly and indirectly), value added and total government revenues.

Tab. 4 Selected indicators of beer economy 2008 2010 2012 Index 12/08 84,62% Total number of jobs 20800 16500 17600 94,87% Value-added (million Euro) 234 191 222 105,56% Government revenues (million Euro) 216 211 228 Excise duties (mil Euro) 58 56 56 96,55%

VAT (on-trade sector - million Euro) 49 48 57 116,33%

VAT (off-trade sector - million Euro) 46 48 46 100,00%

Income tax, payroll tax and social security revenues (brewing companies - million Euro) 7 8 9 128,57%

Income tax, payroll tax and social security revenues (other sectors - million Euro) 56 51 60 107,14%

(Source: The contribution made by beer to the European economy)

Contribution of the brewing industry to the Slovak economy is expressed in value-added which decreased by more than 5% as an impact of beer production stagnation. The same situation is it also in jobs opportunities that decreased by 16% in searched period.

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Conclusions The brewing o beer has a long tradition in the Slovak Republic. As a result of the close proximity to the Czech Republic as well as the mutual history, beer is one of the most favourite drinks in Slovakia. In the past there were many small regional breweries. The political and economic development in the second half of the 20th century led to the centralisation in the industry. After the short period in the 90ties, when the centralisation receded a little bit, the industry is centralised once again, this time it is a result of the globalisation. There is a trend of decreasing beer consumption (in some regions the wine is being preferred to beer) followed by the decreasing beer production (which is compensated by the higher import). One of the reason resulting in lower consumption (apart from the obvious economic reasons related to price) is the likeness of the beers sold under different brands even if the owner is the same. It is a usual policy implemented by Both Heineken and SAB-Miller. The customers` choices were limited. This emerging market opportunity was used by entrepreneurs who started to produce special beers in the independent breweries all around the Slovak Republic. The majority of these entrepreneurs has two things in common: they like beer and they diversified to brewing from another type of business. Nowadays there are more than 30 microbreweries and brewpubs in Slovakia. Interesting thing is they do not regard each other as competition rather more as partners. The close cooperation taking form of serving different independent beer brands under one roof or exchange of experience (or even downright exchange of know-how) is very common. From the economic point of view the beer brewing is very attractive (there are supporting program schemes emerging among EU funds, the investment pay-back period in some cases is less than 4 years etc.). Based on these fact we expect the number of microbreweries to increase in the near future.

Acknowledgement

This work was co-funded by European Community under project no 26220220180: Building Research Centre „AgroBioTech".

Literature: Adams, W.J. (2011). Determinants of the concentration in Beer markets in Germany and the United States: 1950-2005. In J. Swinnen (Ed.), The economics of beer. New York, IL: Oxford University Press. Colen, L. & Swinnen, J. (2011). Beer-Drinking nations: The determinants of global beer consumption. In J. Swinnen (Ed.), The economics of beer. New York, IL: Oxford University Press. Poelmans, E. & Swinnen, J. (2011). A brief economic . In J. Swinnen (Ed.), The economics of beer. New York, IL: Oxford University Press. The Brewers of Europe. (2013). The contribution made by beer to the European economy. Brussels, Belgium. Retrived from http://www.brewersofeurope.org/docs/publications/2013/FullReport20140123.pdf The Brewers of Europe. (2013). Beer statistics 2012. Brussels, Belgium. Retrived from http://www.brewersofeurope.org/docs/publications/2012/stats_2012_web.pdf Tremblay, C. H. & Tremblay, V. J. (2011). Recent economic developments in the import and craft segments of the US brewing industry. In J. Swinnen (Ed.), The economics of beer. New York, IL: Oxford University Press.

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Title: Proceedings ICABR 2014

Name of authors: Composite authors

Publisher: Mendel University in Brno, Czech Republic

Published edition: First edition, 2015

Number of pages: 1222

Format: PDF

Quantity: 150 pcs

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