In Business News this week: the Czech public debt reaches a new high; Czechs buy less food, clothes and home appliances; Albania is set to withdraw ČEZ’s licence to operate in the country; up to 40 percent of retailers violate trade regulations during post-Christmas sales; and the popular Czech butter spread will undergo an EU-enforced name change by mid 2013.
Czech public debt reached new high last year
The Czech state debt in 2012 increased by around 10 percent to reach the total of 1.688 trillion crowns, or around 86.2 billion US dollars, the Finance Ministry said. The debt is expected to exceed 43 percent of the country’s gross domestic product. Last year, the debt rose by 168 billion crowns; however, the Finance Ministry also increased its reserve for the financing of the debt by some 65 billion, mainly by issuing government bonds. The deficit of last year’s state budget reached 101 billion crowns, or 3.1 percent of GDP, down from 143 billion in the previous year.
Czechs buy less food, home appliances
November’s retail sales dropped by 1.8 percent, after a 2.2 percent surge registered in October, according to figures by the Czech Statistical Office released this week. The decrease is attributed mainly to lower sales of new cars and home appliances as well as retail sales of food, clothes and shoes, the statistical office said. New car sales stagnated over the whole of 2012, increasing by just 0.42 percent. Czechs increasingly bought cars with a lower fuel consumption and diesel engines. The share of new diesel cars sold reached 40 percent for the first time.
Albania to withdraw ČEZ’s licence
Albanian authorities announced this week that by the end of the month, they would withdraw the licence from a daughter company of the Czech power producer ČEZ to operate in the country. The move is seen as retaliation for ČEZ’s decision in November to cut electricity supplies to its non-paying Albanian customers, according to Moody’s rating agency which also said the firm’s exit from the country would cost around 5 billion dollars.
ČEZ acquired a majority stake in an Albanian power distribution company in 2009 but ran into problems last year when the Albanian regulator approved a 91% increase in electricity prices but didn’t allow the company to pass through the increase to its customers. ČEZ CEO Daniel Beneš said the company would seek international arbitration against Albania over the lost investment while the Albanian government accused ČEZ of having incurred damages of one billion dollars.
Inspection: 40 percent of retailers violate trade regulations during post-Christmas sales
Up to 40 percent of Czech retailers violated trade regulations during their post-Christmas sales, the Czech Trade Inspection said. Inspectors carried out nearly 300 checks across the country to find that in many cases, retailers provided misleading information on the prices of the goods, and often misinformed customers of the real scope of the discounts. The highest proportion of trade violations – 73 percent -was discovered in the South Bohemian and Vysočina regions, the lowest – 23 percent – in the capital. The Czech Trade Inspection will continue to monitor retail sales until the end of the month.
Popular Czech butter spread to undergo EU-enforced name change by mid 2013
The popular Czech diary product, butter spread, will undergo an EU-enforced name change by the end of the year, the Czech Agriculture Ministry said this week. The EU’s Court of Justice ruled in October the product cannot have the word butter in its name because it contains much less milk fat than required by EU legislation. The butter spread, known in Czech as pomazánkové máslo has been on the market for some 30 years. Producers will probably change the product’s name to just pomazánkové, meaning spread, although some more inventive proposals have also appeared, including “you-know-what spread”, “Barroso spread”, or “diary product known as butter spread prior to EU bureaucrats’ intervention”.