Bulgaria: Beer contributes 127 million euro to Bulgarian economy

Total tax revenue for the Bulgarian government from the production and consumption of beer is estimated at around 93 mln euro a year, says an Ernst&Young survey of the employment, value added and tax contributions made by beer to the European economy, Dnevnic announced May 15.

Further total VAT revenues are estimated at 59 million euro (33 mln euro on beer sold on-trade) and workers whose job can be attributed to the production and consumption of beer pay a total direct personal tax of around 10 mln euro, said the report.

The Bulgarian brewing sector has been modernised rapidly in recent years. To a large extent this explains the high productivity of this sector and its employees. With only a 6% share in total employment from the production and sale of beer, the brewing sector accounts for just over 40% of total value added generated due to the production and sale of beer, said Ernst&Young.
The total contribution of the brewing sector to the Bulgarian economy - directly and indirectly, is estimated at around 127 mln euro.

The Bulgarian beer market is one of the smallest in Eastern Europe, but has shown increasing volumes in recent years. Total market volume is estimated to be 4.7 mln hectolitres.

Market leaders in Bulgaria are the Zagorka brewery and Kamenitza, both part of one of the major European brewing companies. With beer sales at 1.5 mln hectolitres (in 2003: 1.3 mln), the market share of Zagorka is higher than 30%.

Kamenitza also has a market share of more than 30% (in 2003: 26.9%), producing 326,000 in the first quarter of 2005 (total production in 2005 is estimated to be 1.3 mln hl), said the report.

Apart from the brewing companies forming part of international brewing groups, there are a limited number of independent breweries. Two of these are now part of Bulbrew. Other independent breweries are Bolyarka, Lomsko Pivo and Sofia.

There are currently 13 breweries in Bulgaria, operated by 7 brewing companies. One brewing group operates 4 breweries, three other companies each 2 breweries.

According to the Union of Brewers in Bulgaria (UBB) it can be estimated that 33% of total beer consumption is on-trade (in pubs and other segments of the hospitality sector). This means beer sales in the hospitality sector amount to 1.5 million hectoliters.

With an average consumer price in the hospitality sector of 1.3 euro a litre (including VAT), this means the hospitality sector enjoys a turnover stimulus of almost 200 mln euro (including VAT).

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