Denmark tackles dramatic growth in cross-border beer trade with tax reductions

Denmark decided to curb vigorously growing cross-border trade in beverages by reducing the excise duty on beer and soft drinks. Thanks to this tax reduction, cross-border trade has declined and more sales of beer and soft drinks are being made in Denmark.

In 2013, Denmark reduced the tax on beer by 15 per cent and the tax on soft drinks by 50 per cent. There was an increase in sales of beer and soft drinks in Denmark, while cross-border trade took a sharp downswing. The tax on soft drinks was completely abolished in 2014. These tax reductions are part of Denmark’s growth plan.

“The tax reduction was the right solution – it increased domestic sales and reduced cross-border trade. More products are now being bought where they’re being consumed,” says Niels Hald, Secretary General and CEO of the Danish Brewers Association.

The excise tax on 4.7% alc/vol beer in Denmark is EUR 0.35 per litre compared to EUR 0.09 per litre in neighbouring Germany. According to a study conducted by Regioplan Policy Research and EY, almost half of all Danes (49.8 per cent) buy beer from abroad, mainly from Germany.

The excise tax on 4.7% alc/vol beer in Finland is EUR 1.51 per litre compared to EUR 0.34 per litre in Estonia. Finland and Estonia are the EU neighbours with the largest difference in beer tax. Large tax differences lead to substantial cross-border trade between countries.

“The biggest problem with Finland’s alcohol policy is the growing cross-border trade with Estonia. The new government needs to act in order to curb it. Increasing border control – and therefore government spending – is not an attractive option. It would be much better to let competitive taxation sort out this problem by itself,” says Elina Ussa, Managing Director of the Federation of the Brewing and Soft Drinks Industry.

Additional information:
Federation of the Brewing and Soft Drinks Industry
Managing Director Elina Ussa, tel. +358 (0)45 269 7711
Communications Manager Outi Heikkinen, tel. +358 (0)50 370 8677

Secretary General, CEO, Niels Hald, Danish Brewers Association, tel. +45 7216 2424

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