Last year, the total volume of barley produced fell by 15%, but data for the first few months of this year show that we are producing more beer. According to the State Revenue Service, 24 million liters of beer were produced in four months, while 37 million liters were imported. Brewers say the new beer season has got off to a very productive start.
"For us, preparations for the shortest night of the year start already in January. This year, in addition to the traditional and classic beer flavors, we have also worked hard to offer new non-alcoholic flavors. This year, it is the non-alcoholic beers that have seen the fastest growth. Compared to the first five months of last year, it has grown by 180%, which is encouraging," said Aigars Ruņģis, the owner of Valmiermuiža brewery.
Non-alcoholic beer is offered by both small craft breweries and large producers. Over the last four years, the range of this segment has only grown and the choice for customers is increasing. Another important trend is the growing demand for the non-alcoholic rye and malt drink kvass.
"One negative trend is that Latvia has been importing more and more beer over the last decade and has turned into a strong beer-importing country, and more than 60% of all beer sold in Latvia is imported, often under Latvian names.
"Latvia, where beer is the national drink, has become a strong importer of beer as a result of various not-so-successful economic policies," says Aigars Ruņģis.
The industry is not short of other challenges.
"There are enough challenges in the beer industry. Production is a resource-intensive and long enough process. At the moment, the whole of Europe is facing a dramatic increase in raw material and energy prices, while people's purchasing power is not increasing. Consequently, production costs are rising, while the price of products must not increase so rapidly, as this would reduce sales," said Pēteris Linins, Chairman of the Board of the Latvian Brewers' Association, about the challenges.
There are 68 registered breweries in Latvia and competition in the sector is very fierce.
"Local producers are forced to compete with imported products, which come into Latvia in large quantities. This is the playing field that local producers are currently forced to play on. At the same time, it has to be admitted that it is working well enough because the breweries have not closed down in recent years. A few new ones have opened up, but overall it is not an easy business," Linins concluded.
Producers are also hoping for consistency in the country's tax policy. The excise duty policy for the next three years was approved earlier this year and Linins hopes that there will not be any abrupt changes that could affect the sector.
Over the past decade, beer production in Latvia has been declining and just under half of the beer sold is produced in Latvia.
One of the reasons for this is high labor taxes, which have led some factories to move their production out of the country. Conditions should be created to make it more profitable to produce in Latvia than in neighboring countries, the union leader believes.
Meanwhile, the Latvian Independent Brewers' Association has found in a survey that 88% of Latvians would prefer beer brewed in Latvia and calls for attention to be paid to the country of production on product labels.
