Valmiermuiža owner: Latvia's breweries face disaster without access to government support

The owner of one of Latvia's leading independent breweries is warning that the brewing industry will face severe trouble unless it is included in government energy price mitigation measures. 

 
"Valmiermuižas alus" (Valmiermuiža beer) founder and owner Aigars Ruņģis says the government's decision not to include brewers on its list of "energy intensive" businesses means many of them could face failure in coming months.
 
"I am very disappointed that all Latvian beer producers, including small breweries, have been excluded from the circle of beneficiaries in the draft law on support for energy-intensive manufacturing companies," Ruņģis said.
 

"With this decision, the government is saying that the small brewers in Latvia will not be helped in this difficult time, thereby exposing them to ruin.  

"Valmiermuiža alus has been brewing beer, kvass and soft drinks in Latvia for more than 10 years, employing more than 100 people. Last year, we paid 1.88 million euros in taxes, which is an important contribution to the state budget. Last year, the export of our brews increased by 20%, this year we have planned another 20% increase in exports, expecting that it will make up around 10% of the total turnover," he continued.  

"Brewing is energy-intensive because beer must be both brewed and cooled. Last year, Valmiermuiža alus' electricity consumption reached 600 MWh, and its cost was 64,000 euros, while gas costs reached 108,000 euros for 2,500 MWh. This year, the total cost of electricity and gas has increased more than three times and will reach 526,000 euros. Therefore, we fully  meet the criteria of an energy-intensive producer, which stipulates that last year we must have consumed more than 500 MWh of gas in  order to receive state support. Our gas consumption is five times the minimum threshold that determines whether a company is energy intensive.   

Introducing similarly massive increases in the price of its beer "is not a solution" Ruņģis argued, taking into account both the purchasing power of the Latvian population and the prices of imported beer. As a result "state support is critical to both preserving jobs and keeping the industry alive  this winter," he said.

Unless breweries are included in the energy-intensive list "We will be forced to reduce the amount of brewing this winter season, which will lead to both the elimination of jobs and the loss of the export market," he said.

You can read more about Latvia's German-inspired brewing traditions and Valmiermuiža in this previous feature.  

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