Sales of brewery beverages collapse – State loses over EUR 50 million in alcohol tax revenue

A total of 774.6 million litres of brewery beverages were sold in 2012. Domestic sales of beer, cider, long drinks, mineral waters and soft drinks fell by 51.4 million litres, or 6.2 per cent. Such a dramatic fall in sales has never been seen before. Sales of mild alcoholic beverages fell by no less than 7.4 per cent on 2011, and sales of non-alcoholic beverages by 4.4 per cent. These figures are based on sales statistics compiled by members of the Federation of the Brewing and Soft Drinks Industry.

The alcohol tax on beer, cider and long drinks was increased by 15 per cent at the beginning of 2012. At the same time, the tax on soft drinks was raised to 11 cents per litre. A huge fall in sales – 51 million litres – means that the State has lost not only revenue from VAT, but also EUR 53 million in alcohol tax and EUR 1.6 million in soft drink tax.

“The brewing industry has been hard-pressed by the tax increases of recent years. Last year, an exceptional fall in sales was seen simultaneously in all beverage categories. When devising tax solutions, decision-makers should carefully evaluate whether tax increases will endanger jobs in the industry. The brewing industry provides direct employment for 2,300 and indirect employment for 30,000 people in Finland,” says Elina Ussa, Managing Director of the Federation of the Brewing and Soft Drinks Industry.

In addition to tax increases, sales were burdened by a rainy summer and stores stocking up in 2011 before the tax increases. The consumption of alcoholic beverages has been on the decline for five years running.

“There seems to be a permanent reduction in alcohol consumption, so no tax increases or radical changes in alcohol legislation are required,” says Ussa.

High taxes steer consumers towards Estonia

A report from the National Institute For Health and Welfare, Price Trends for Alcoholic Beverages in 2011, indicates that the real prices of beer and long drinks have risen since 2000, while real prices for other alcoholic beverages have fallen. In the turn-of-year changes, taxes on brewery beverages were increased by more than those on other alcoholic beverages. Finland’s beer tax is 53 per cent higher than Sweden’s. It is also the highest in the EU, and no less than five times higher than Estonia’s.

“The State’s taxation policy steers consumers towards Estonia, where they can buy beverages for less than half the Finnish price, and Estonia receives all that tax revenue. Travellers have gone from importing alcohol by the bagload to importing it by the vanload. Tax increases no longer generate revenue for the State as they once did, as travellers’ private imports have narrowed the tax base,” says Ussa.

An increasing volume of beverages is sold to foreign transport companies, such as Estonian ferries. 21.4 million litres of beer were exported to foreign transport companies, and beer exports to ferries rose by 4.5 million litres, or 27 per cent, on 2011. 2.5 million litres of cider were exported to foreign transport companies, representing growth of 0.9 million litres, or over 50 per cent.

DOMESTIC SALES 2012

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)9 148 871 (ETL exchange), GSM +358 (0)45 269 7711
Communications Manager Outi Heikkinen, tel. +358 (0)9 148 871 (ETL exchange), GSM +358 (0)50 370 8677
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