Ruling in Favor of the State Drives Largest Istrian Brewery into Bankruptcy

Will the sixth largest brewery in Croatia cease production? Bankruptcy proceedings have been opened against Istarska pivovara, and Pavao Mrkonjić has been appointed as the bankruptcy trustee. The account has been blocked since early June due to 1.27 million euros.

This is the epilogue of a legal dispute with the state regarding the ownership of the land on which the brewery’s facilities are located. The complex spans more than 2.5 hectares, and it has been determined that Istarska pivovara is in illegal possession of the properties, which the brewery contested during the court proceedings.

Brewery – Negligent Possessor

The reasoning of the ruling by the Commercial Court in Pazin stated that the brewery is a negligent possessor because it knows that it is conducting beer production activities within properties owned by the state, with which it has not resolved property relations through leasing.

The former State Office for State Property Management requested in 2013 that the brewery hand over the disputed properties, along with the associated equipment, to the Republic of Croatia.

‘Government is not the real owner’

Istarska pivovara opposed the lawsuit in its entirety, claiming that the registration of the state in the land registry does not reflect the actual state, and that the state is not the real owner. ‘Within the factory premises, there are properties exclusively owned by the defendant (new hall, etc.) as well as vital parts of the brewery (energy, fermentation, bottling, etc.), so there is no question that the defendant is a negligent possessor,’ states the interpretation of Istarska pivovara in the reasoning of the ruling.

On February 3, 2020, the company submitted a request to the Ministry of State Property for the purchase of the land, citing the legal provision that the state is obliged to sell the land to a person who has legalized the buildings on that land.

Tendencies for Continued Production

The bankruptcy trustee was informed by the company’s director, Davor Doko, that the brewery continues to produce beer, albeit at a reduced capacity, and that ‘there is a tendency for continued production and the survival of the brewing industry.’ However, it remains uncertain whether this tendency will materialize.

The owner of Istarska pivovara is Zrinko Perić. He is also the owner of Hum development, which is interested in building a tourist resort with ten villas and a hotel in the Rujavac area of Humščina.