Finland’s beer tax must be halved – now the highest in the EU
Finland has by far the most heavily taxed beer of all EU countries, and Finland’s beer tax is many times that of Estonia’s. Every increase in Finnish alcohol taxation has fuelled the volume of beverages imported via cross-border trade. The Federation of the Brewing and Soft Drinks Industry demands that beer tax be halved.
Finland’s beer tax is much higher than other EU countries, and this has increased travellers’ private imports to record levels. According to a survey conducted by the National Institute for Health and Welfare (THL), travellers’ private imports of beer rose by 15.7 per cent between 2015 and 2016. Only a third of this beer was produced in Finland. Due to the high level of travellers’ private imports, Finland loses not only over EUR 300 million in alcohol tax revenue but also VAT.
Finland’s beer tax has been raised five times since 2008. The two most recent tax hikes have not increased State tax revenue, but have steered consumers to purchase their beverages from abroad. About two-thirds of the higher-strength beer (Class IV) consumed in Finland is purchased elsewhere, mainly from Estonia. Over four times as much beer is privately imported than is sold at Alko.
The Federation of the Brewing and Soft Drinks Industry demands a taxation policy that would not steer consumers to bulk buy beverages via cross-border trade.
“The increase in travellers’ private imports is a problem that requires a permanent solution. Finland must reduce its beer tax to a level that is competitive with Estonia’s. This means gradually halving the tax on beer with a moderate decrease of 10-15 per cent per year,” says Elina Ussa, Managing Director of the Federation of the Brewing and Soft Drinks Industry.
Finland’s tax on 4.7% alc/vol beer is EUR 1.51 per litre. Lowering the beer tax by 10 per cent at a time over the next seven years would result in a tax rate of EUR 0.72 per litre on 4.7% alc/vol beer. Estonia’s beer tax currently stands at EUR 0.42 per litre, but the country is planning to implement a 70 per cent rise in its beer tax this summer. Even after this increase, Estonia’s beer tax will still be half of Finland’s at EUR 0.71. Estonia will also retain the benefit of lower VAT, a lower container deposit, and lower labour costs.
Although halving Finland’s beer tax would mean less tax revenue for society, the decrease would have a significant dynamic impact. The largest amount of travellers’ private imports, measured in litres, is accounted for by beer. If private imports of beer could be curbed, imports of other alcoholic beverages would also decrease. According to the National Institute for Health and Welfare (THL), travellers privately imported a total of 81.5 million litres of alcoholic beverages in 2016. 59.5 million litres, or 73 per cent, of these were beer, cider and long drinks. Beer alone accounted for 36 million litres – 44 per cent of all imports.
One key objective of the new Alcohol Act is to improve the competitiveness of Finland’s domestic market and curb cross-border trade, but preparation of the amendments has been far too slow.
“This legislation has already been under preparation for six years – and it’s still not ready. We need fast-acting measures to curb travellers’ private imports,” says Ussa.
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 Captol Invest Oy, Oy Hartwall Ab, 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.