Chapter

How the East was Won: The Foreign Takeover of the Eastern European Brewing Industry

Johan F. M. Swinnen and Kristine Van Herck

in The Economics of Beer

Published in print October 2011 | ISBN: 9780199693801
Published online January 2012 | e-ISBN: 9780191731884 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199693801.003.0014
How the East was Won: The Foreign Takeover of the Eastern European Brewing Industry

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The beer market, like all markets in the former communist countries, has been strongly affected by the economic reforms in the beginning of the 1990s. This caused a substantial decline in the production of barley, malt, and beer. However, the brewery sector soon attracted much interest from foreign investors, which faced a problem sourcing sufficient high quality malt in order to produce high quality beer. Therefore, they reintroduced vertical coordination in the supply chain to obtain malt and barley that consistently met their quality requirements. Later, when incomes and economic conditions improved, vertical coordination became less important. This chapter describes and analyzes this dramatic restructuring of the beer industry and changes in the industrial organization of its supply chain over the past two decades, documented by comparative data and detailed case study evidence from the Slovakian beer and malting industry.

Keywords: beer; Eastern Europe; Slovakia; consumption; production; industrial organization; supply chain

Chapter.  6717 words.  Illustrated.

Subjects: Economic Systems

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