Domestic sales of brewery beverages fall – beer tax should be lowered to match Estonia’s

In the January–June period of 2017, domestic sales of beer, cider and long drinks totalled 219.0 million litres. Beverage sales fell by 2.6 million litres, or 1.2 per cent, 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: Captol Invest, Hartwall, Olvi, Saimaan Juomatehdas and Sinebrychoff.

Member companies of the Federation of the Brewing and Soft Drinks Industry sold a total of 186.7 million litres of beer by the end of June. Sales were down by 1.7 per cent. 14.4 million litres of cider were sold, representing growth of 0.8 per cent, and sales of long drinks rose by 3.6 per cent to 17.8 million litres.

Alcohol tax hikes do not increase tax revenue

Finland’s alcohol tax has been raised twice during the 2010s. These increases have sought to generate additional revenue for the State. They have not, however, increased the revenue received from alcohol taxation. Although the State was still receiving EUR 1.394 billion in alcohol tax revenue after the last tax increase in 2014, this figure fell to EUR 1.356 billion the following year. Travellers’ private imports of alcoholic beverages have cut into the revenue from alcohol taxation. The brewing industry estimates that each year the State loses about EUR 300 million in alcohol tax revenue alone due to travellers’ private imports.

Although Estonia increased its beer tax in July, it is still less than half of Finland’s. Finland’s beer tax remains the highest in the EU. Finland’s tax on 4.7% alc/vol beer is EUR 1.51 per litre compared to EUR 0.73 per litre in Estonia. Estonia also retains the benefit of lower VAT, container deposits, and lower labour costs. In Latvia, Estonia’s neighbour, the beer tax is only a seventh of Finland’s – just EUR 0.21 per litre.

“Finland must solve the problems of escalating cross-border trade itself. The Government’s new Alcohol Act is a moderate step in the right direction. The new act should be put into immediate effect, but beer tax should also be lowered to be more on par with Estonia’s. A sensible policy would support competitiveness in the domestic market and make sure that Finland gets its fair share of the available tax revenue,” says Elina Ussa, Managing Director of the Federation of the Brewing and Soft Drinks Industry.

Tax hikes on brewery beverages have fuelled travellers’ private imports. According to the National Institute for Health and Welfare’s latest survey, travellers’ private imports of beer, cider and long drinks totalled EUR 57.7 million litres. Between May 2016 and April 2017, travellers’ private imports of brewery beverages increased by over 11 per cent on the corresponding period of the previous year. The majority of beverages are purchased in Estonia and on ships.

DOMESTIC SALES OF BEER, CIDER AND LONG DRINKS, 1 JANUARY–30 JUNE 2017

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. As of the beginning of 2011, 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

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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.