Distribution of Wine in Czech Republic

The cultivation of grapevines in the Czech Republic has a tradition spanning over a thousand years. The origins of winemaking in the Moravia region date back to the second century. Viticulture and winemaking are integral parts of the country’s agricultural and horticultural heritage. Today, the Czech Republic is one of the northernmost wine-growing regions in Central Europe, divided into two historical wine-growing areas: Bohemia and Moravia.

The Czech Republic is a relatively small wine producer within Europe. Domestic wine production is insufficient to meet local demand, making the country highly open to foreign suppliers. Consequently, the Czech wine market relies heavily on imports, primarily from Southern and Eastern Europe. Demand has been increasing recently, driven primarily by rising tourism and a growing number of young wine connoisseurs.

Since the Czech Republic joined the European Union, the wine industry has undergone many changes, particularly in legislation. The wine market is now governed by the EU's standard organization system. From 2014 to 2018, the European Union allocated more than CZK 700 million in subsidies to the Czech Republic. These funds are primarily intended to convert vineyards and enhance the competitiveness of domestic wines in global markets.

In conclusion, while the Czech Republic remains a small producer, its rich tradition, evolving regulatory framework, and growing consumer market offer promising opportunities. Compliance with EU and domestic regulations, combined with strategic marketing and distribution, will be key for companies aiming to succeed in this dynamic sector.

Trademark legislation in the Czech Republic is governed by the Industrial Property Act, aligned with European Union regulations. This framework provides for the registration, protection, and enforcement of trademarks. Trademarks must be distinctive and non-deceptive, with protection granted for an initial term of ten years, renewable indefinitely. The Czech Republic participates in the EU Trademark system, allowing right holders to obtain unitary protection across all member states through a single registration.

In the wine sector, trademarks help differentiate products and protect producers' reputations. They often incorporate protected geographical indications (“GI”) and specific quality terms. These marks are subject to both trademark law and GI regulations, ensuring that only wines genuinely originating from designated regions or meeting prescribed standards can use protected denominations, preserving product authenticity and consumer trust.

The Industrial Property Office (“Úřad průmyslového vlastnictví”) administers trademark registration, opposition proceedings, and cancellation actions. Enforcement mechanisms include civil litigation for remedies such as injunctions and damages. Additionally, Czech law enforcement agencies and customs authorities actively combat counterfeit goods, including fraudulent wines, by intercepting illegal imports and distribution. Administrative penalties apply for trademark violations, while criminal sanctions address severe infringements like counterfeiting, ensuring comprehensive protection of trademark rights in the wine sector.

Labelling requirements are stipulated under the Czech Viticulture and Winemaking Act (Act No. 321/2004 Sb.) and generally follow European legislation. Wine labels in the Czech Republic must display essential information, including:

• The category or type of wine
• The appellation of origin or the protected designation of origin/geographical indication, confirming the wine’s authenticity and regional characteristics
• The country of origin, typically indicated as “Product of…”
• Alcohol content, expressed as a percentage by volume
• The name and address of the bottler or producer, providing traceability and accountability
• For imported wines, the importer’s name and address preceded by “Importer” or “Imported by”
• For sparkling wines, mandatory disclosure of sugar content to inform consumers about sweetness levels
• Allergenic ingredients, such as “Contains sulphites,” to protect sensitive consumers
• Lot identification marked with the letter “L” to ensure traceability for recalls or quality issues

These labelling requirements enhance consumer safety and regulatory compliance.

Before 1989, under the communist regime, private ownership of companies did not exist in Czechoslovakia, and commercial activities, including alcohol production and distribution, were managed by the state. Advertising was largely insignificant. Following the political and economic reforms after 1989, the advertising sector rapidly expanded, leading to a surge in marketing alcoholic beverages, including wine, which contributed to increased alcohol consumption, particularly among adolescents.

After joining the European Union in 2004, the Czech Republic harmonized its legislation with EU standards. While many EU countries impose strict rules on alcohol promotion, the Czech Republic has maintained comparatively liberal regulations.

Wine advertising in the Czech Republic is regulated by a combination of statutory and non-statutory measures. Three primary laws govern alcohol advertising:

• Act No. 40/1995 Sb., on the Regulation of Advertising
• Act No. 231/2001 Sb., on the Operation of Radio and Television Broadcasting
  
• Act No. 65/2017 Sb., on the Protection of Health Against Harmful Effects of Addictive Substances

Under these laws, wine advertising is permitted but subject to the following limitations:

• It must not be aimed at individuals under the legal drinking age of 18.
• It cannot suggest that wine consumption improves performance, social or sexual success, or health.
• It must not portray abstaining from alcohol negatively.

In addition to legal restrictions, producers and marketers are expected to follow self-regulatory codes promoting ethical advertising:

• The Code of Advertising Practice of the Czech Advertising Standards Council further defines acceptable advertising content across all media.
• The Code of Practice of the Association of Alcohol Producers provides industry-specific guidance, particularly relevant for regional branding and tourism.

Over 80% of wine imported into the Czech Republic comes from EU countries, especially Hungary, Italy, and Spain. In compliance with EU treaties, these imports are exempt from customs duties. However, excise duties and VAT at 21%, calculated on the customs value plus any applicable excise duties, apply. A notable exception is still wine, which represents 93% of domestic wine consumption and is exempt from excise duties. This exemption creates a fiscal gap domestically but also offers a substantial business opportunity for exporting companies.

Wine imported from non-EU countries is subject to customs duties according to the EU’s Common Customs Tariff and must undergo standard customs clearance.

Wine companies operating in the Czech Republic must comply with local tax reporting and payment obligations overseen by the Czech Tax Administration. Corporate income tax is levied at a rate currently set at 21%. These taxation and regulatory frameworks significantly influence the competitiveness of the Czech wine market, affecting pricing, consumer choices, and the overall business environment.

Distribution of wine in the Czech Republic is primarily governed by distribution contracts, which are considered atypical contracts under Czech civil law. These contracts are not explicitly regulated by the Czech Civil Code but are generally interpreted and supplemented by related contract provisions, such as purchase agreements (“kupní smlouva”) and service contracts. This legal context requires careful drafting of distribution agreements to clearly define all contractual obligations and avoid ambiguities. Before drafting a distribution contract, it is essential to conduct thorough market research, including customer surveys to understand consumer preferences and trends. Using these insights, a precise business model should be developed, outlining geographic territory, contract duration, and detailed product lists. Key elements of a distribution contract include:

• Definitions of product scope
• Territorial rights (exclusive or non-exclusive)
• Pricing and payment terms
• Delivery obligations
• Compliance with Czech and EU wine legislation (labelling, licensing)
• Marketing responsibilities
• Confidentiality clauses
• Dispute resolution mechanisms

Particular attention should be given to EU antitrust laws, especially prohibitions on resale price maintenance, restrictions on online sales, and bans on limiting resale across member states to ensure fair competition.

Establishing an e-commerce platform can provide strategic advantages in the Czech wine market by enabling direct consumer engagement and expanding sales channels while complying with EU and Czech trade regulations.

Industry professionals should also monitor major trade events such as Wine Prague—the country’s largest professional wine fair—and the International Wine Tasting Fair in Prague, featuring wines from France, Italy, Spain, and beyond. These events offer invaluable opportunities for networking, gaining market insights, and forming partnerships with importers, distributors, and producers.