The steel in Pivovar Chříč's brewhouse swallows its profit

A growing brewery that keeps very little of each sale

Pivovar Chříč is a small brewery in the village of Chříč in western Bohemia, the kind of place where the beer on the tap is made a few metres from the glass. It is an s.r.o., the Czech equivalent of a limited liability company, and its accounts cover the company on its own, under Czech accounting rules, in Czech crowns, for calendar years.

On the surface, 2025 was a very good year. Revenue rose 49.9%, from CZK 17.5m to CZK 26.2m, an extra CZK 8.7m of sales. Operating profit, what is left after paying for ingredients, staff, energy and the wear on the equipment, went from CZK 113k to CZK 492k. That is a rise of 335.4%.

Now put the result next to the size of the business. Out of CZK 26.2m of revenue, the brewery kept CZK 492k as operating profit. That is an operating margin of 1.9%: of every hundred crowns a customer paid, the company kept under two after running the brewery. A year earlier it was 0.6%, so the margin did improve, by 1.2 pp. It is still thin.

The comparison makes it plain. Against 3 comparable Czech food and drink companies, a brewery, a juice maker and a tea room business, the median operating margin in 2025 was 14.0%. Pivovar Falkenštejn, the other brewery in the group, kept 14.0% on revenue of CZK 39.1m. FRUITISIMO GROUP kept 22.8%. Only DOBRÁ ČAJOVNA came close to Chříč, at 3.7%. Pivovar Chříč sits 12.2 pp below the median. It is busy and growing, but it keeps less of each sale than the businesses around it.

The brewhouse eats the profit before it reaches the books

A margin this far below peers usually has one of four causes: lower prices, higher costs per unit, a less profitable mix of products, or an investment that the peers paid off years ago. For a small brewery the last one is the obvious suspect, and the accounts point the same way.

Brewing is a business of expensive steel. Kettles, fermentation tanks, cooling, bottling or kegging lines: all of it is bought up front and then written off over years. That write-off is depreciation, the accounting charge for equipment slowly wearing out. At Pivovar Chříč it came to CZK 3.7m in 2025, up a little from CZK 3.5m in 2024. Set that against operating profit of CZK 492k and the picture is clear. Depreciation is several times larger than the profit itself.

Strip depreciation out and the brewery looks very different. Operating profit plus depreciation, known as EBITDA (earnings before interest, tax, depreciation and amortisation), was CZK 4.2m in 2025. That is 16.0% of revenue. In other words, the day to day brewing and selling does earn money. Most of it then goes to pay for the equipment that makes the beer.

The balance sheet tells the same story. Total assets stood at CZK 29.7m at the end of 2025, against CZK 29.3m a year earlier. For a company with CZK 26.2m of annual revenue, that is a lot of brewery: its assets are worth more than a full year of sales. A business that owns more than it sells in a year has to work hard to make those assets pay.

Growth helped, but each new crown earned less

The jump in operating profit is the other half of the story, and it is less flattering than 335.4% sounds. Profit grew 6.72× as fast as revenue. That is what happens when a large part of the cost base is fixed: the tanks and the depreciation cost the same whether the brewery sells more or less, so extra sales fall to profit quickly.

But look at the line before depreciation. EBITDA rose only 16.2%, from CZK 3.6m to CZK 4.2m, while revenue rose 49.9%. The EBITDA margin fell from 20.6% to 16.0%, a drop of 4.6 pp. So the new sales came with heavier running costs: ingredients, energy, staff, or products that earn less per crown. Operating profit rose mainly because depreciation barely moved, not because each sale became more profitable.

The accounts do not split revenue between beer, food, events or other products, so they do not show which of these pushed the running costs up. The figure that would settle it is the cost of materials and services set against revenue, line by line, for both years.

What it means for a craft beer and the people who drink it

For drinkers, this is the economics behind the price of a craft lager in a village pub. A small brewery carries almost the same equipment as a much larger one, spread over far fewer litres. That is why small breweries push for the tap, the brewery shop and the guest who buys a crate on the way home: every litre that goes through equipment already paid for helps carry the steel. It also explains the pressure on price. A brewery with a thin margin has little room to absorb a dearer harvest of malt or a winter of high energy bills without passing it on.

For the wider trend, Pivovar Chříč is a reminder that the Czech craft beer boom has a balance sheet side. Opening a brewery is a capital project first and a beer business second. The growth in sales is real, but until the equipment is largely written off, the profit stays small, and the business has little left over to repay debt or fund the next tank.

For anyone running a business with heavy equipment, the check is simple. Take your main cost lines, divide each by revenue, and set the result next to a comparable company. Then ask whether your prices rose as fast as your costs did. At Pivovar Chříč, the costs before depreciation grew faster than sales in 2025, and that is the line I would watch next year.

My verdict: Pivovar Chříč is not a weak brewery, it is an expensive one. The beer pays its way; the brewhouse is still paying for itself, and until it does, every extra crown of sales has to work harder than its peers' do.