Domestic sales of brewery beverages fall – alcohol tax should not be raised before the new Alcohol Act

Domestic sales of beer, cider, long drinks, soft drinks and mineral waters totalled 572.9 million litres in January–September 2017. Total sales of brewery beverages fell slightly on the corresponding period of the previous year. These figures are based on sales statistics compiled by the members of the Federation of the Brewing and Soft Drinks Industry: Hartwall, Momentin Group, Olvi, Red Bull, Saimaan Juomatehdas and Sinebrychoff.

Member companies of the Federation of the Brewing and Soft Drinks Industry sold a total of 284.5 million litres of beer by the end of September, representing a fall of 1.9 per cent on the previous year. 22.4 million litres of cider were sold – a fall of 0.2 per cent. Sales of long drinks totalled 28.1 million litres, representing a rise of 1.5 per cent.

Member companies sold more alcohol-free beverages than in January–September 2016. Sales of soft drinks rose by 1.2 per cent to 179.3 million litres, and sales of mineral waters by 0.7 per cent to 58.7 million litres.

Brewing industry concerned over alcohol tax hike

The brewing industry is concerned about the increased tax on alcoholic beverages that will come into force at the beginning of next year. The Government proposal states that the upcoming revision of the Alcohol Act has been taken into consideration in the tax increases. However, the complete revision of the Alcohol Act is still ongoing in Parliament, and no definite date has been given for its adoption.

“The new Alcohol Act and the tax increase should definitely come into force at the same time. The industry is afraid that taxes will first be increased and no new legislation will follow. The tax increase threatens to dilute the revision of the Alcohol Act – a revision that would improve competitiveness in Finland’s domestic market and curb crossborder trade,” says Elina Ussa, Managing Director of the Federation of the Brewing and Soft Drinks Industry.

The planned tax increases are geared towards mild beverages. In terms of litres, beer, cider and long drinks already account for more than 70 per cent of travellers’ private imports. In total, travellers’ private imports equate to 80 per cent of Alko’s annual sales. Beverages are imported from low-tax countries, primarily Estonia and Latvia.

Although Estonia last raised its beer tax this July, Estonia had a much lower tax level to start with and, even after the increase, Estonia’s beer tax is still less than half that of Finland’s. This difference will increase next year when Finland raises its tax, while Estonia has decided to halve the tax increase planned for alcoholic beverages in February 2018. As stated in the Government proposal, when it comes to alcoholic beverages, the price difference between Finland and Estonia remains significant. In addition to alcohol tax, consumers in Finland also pay much higher VAT and deposit charges than those in Estonia.

“The tax increase will have an unfavourable impact on our already falling domestic market. The increase will cause Finland to lose tax revenue to crossborder trade, while simultaneously weakening the brewing industry’s competitiveness and employment capacity, and reducing the profitability of breweries’ investments,” says Ussa.

In the Federation of the Brewing and Soft Drinks Industry’s opinion, the proposed tax increase is inconsistent with one of the priority projects of Prime Minister Sipilä’s Government Programme, that is, work and production in Finland are always productive, and Finland is a competitive country in which entrepreneurship, share ownership and investment are more profitable.

DOMESTIC SALES, 1 JANUARY–30 SEPTEMBER 2017

Beverage 2017 2016 Change Change
                 mill. l. mill. l. mill. l. %
 Beer 284.5 290.0 -5.5 -1.9
 Cider 22.4 22.5 -0.04 -0.2
 Long drinks 28.1 27.7 0.4 1.5
 Soft drinks 179.3 177.1 2.1 1.2
 Mineral waters 58.7 58.3 0.4 0.7
 Total sales 572.9 575.5 -2.6 -0.5

 

Source: Member companies of the Federation of the Brewing and Soft Drinks Industry. The statistics do not include sales by actors outside the Federation nor private imports of brewery products, which are not statistically recorded. The statistics include all the brands of the members of the Federation of the Brewing and Soft Drinks Industry and any private label brands they produce.

Additional information:
Managing Director Elina Ussa, tel. +358 (0)45 269 7711
Communications Manager Outi Heikkinen, tel. +358 (0)50 370 8677

www.panimoliitto.fi, www.kohtuullisesti.fi, www.maljasuomelle.fi
Twitter: @panimoliitto, Facebook: /panimoliitto, Instagram: @panimoliitto

The Federation of the Brewing and Soft Drinks Industry promotes the interests of producers of beer, cider, long drinks, soft drinks and mineral waters in Finland. Its members are Oy Hartwall Ab, Momentin Group Oy, Olvi Oyj, Red Bull Finland Oy, Saimaan Juomatehdas, and Oy Sinebrychoff Ab. The Federation of the Brewing and Soft Drinks Industry is a member of the Finnish Food and Drink Industries Federation.

http://www.panimoliitto.fi/en/domestic-sales-of-brewery-beverages-fall-alcohol-tax-should-not-be-raised-before-the-new-alcohol-act/

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The new Alcohol Act and the tax increase should definitely come into force at the same time. The industry is afraid that taxes will first be increased and no new legislation will follow. The tax increase threatens to dilute the revision of the Alcohol Act – a revision that would improve competitiveness in Finland’s domestic market and curb crossborder trade
Elina Ussa, Managing Director of the Federation of the Brewing and Soft Drinks Industry
The tax increase will have an unfavourable impact on our already falling domestic market. The increase will cause Finland to lose tax revenue to crossborder trade, while simultaneously weakening the brewing industry’s competitiveness and employment capacity, and reducing the profitability of breweries’ investments
Elina Ussa, Managing Director of the Federation of the Brewing and Soft Drinks Industry