Latvia: Latvian brewers hope rest of year won’t be as bad as it seems now

For Latvian breweries, the Midsummer festival brings a lot of extra revenue as the brew heralded in festival songs prompts even those who typically abstain from drink to have a glass or two.

Nevertheless, local beer producers have had a difficult year so far, Latvian Radio reported on June 23.

According to tax service data for the first four months of 2018, both production and EU-targeted exports of local beer have decreased dramatically.

"The first three to four months were the worst," said Ināra Šure, the head of the Latvian Association of Brewers. According to the manufacturers, 35% less beer was produced in Latvia within the first months of 2018.

Several factors have contributed to this.

"First of all there's the ban [on selling beer bottled in two-litre] PET bottles from March 1. This contributed to a decrease of 15%. The second is that the excise tax grew 51%. There hasn't been such a hike in history," said Šure.

But "beer tourism" has helped brewers survive in the difficult times. Šure estimates that in early 2018 about 10% of the beer sold in Latvia was sold on the border with Estonia. Warm weather has also helped, with balmy weather throughout May and most of June contributing to sales of soft drinks and beer.

That's why brewers hope the rest of the year won't be as bad as it seems now.

"The decrease in spring will be covered by the summer season, which according to weather forecasts looks very favourable to drink manufacturers," said Šure.

Trends across Latvia and Europe show that customers are getting more and more interested into craft beers. This has prompted Latvian brewers to introduce new varieties into their offer. While the older generation is more conservative, preferring time-tested brands, young people are more likely to experiment.

"The PET or low-cost segment has decreased the most. But the so-called premium segment has grown a little," Šure says.

The Valmiermuižas brewery is one of the few that can boast an increase in sales, with their turnover increasing 13% in the first few months of 2018.

"What's important is taste and quality, not volume. We've followed this principle for nine years. Beer is as fine a thing as French wine or champagne," said Valmiermuižas alus owner Aigars Ruņģis.

Together with other craft beer brewers, Ruņģis has set up a beer quarter in Rīga. He stresses that small breweries don't try to jump on the "wagon of globalization" and make all their beer in Latvia.

"Small breweries honestly state that the beer has been brewed in Valmiermuiža, Bauska or Brenguļi," said Ruņģis.

Another trend among brewers is that many have started making low-alcohol beer.

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