Slight growth in domestic sales of brewery beverages – industry awaiting the new Alcohol Act

A total of 375.7 million litres of brewery beverages were sold in the January–June period of 2016. Domestic sales of beer, cider, long drinks, mineral waters and soft drinks rose by 9.7 million litres, or 2.6 per cent. 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, Red Bull, Saimaan Juomatehdas and Sinebrychoff.

Although domestic sales of brewery beverages have been falling for a long time, sales picked up thanks to the reasonably good summer weather. Mineral waters in particular experienced significant sales growth of more than 14 per cent.

“Summer is the beverage industry's biggest season, but it's highly dependent on the weather. Luckily, the warm weather started very early this year in May, which boosted sales,” says Elina Ussa, Managing Director of the Federation of the Brewing and Soft Drinks Industry.

The weather has a great impact on the sale of non-alcoholic beverages in particular. Above all, a long hot spell will increase sales of waters and soft drinks.

What's delaying the new Alcohol Act?

The brewing industry is awaiting the new Alcohol Act, which was originally scheduled to come into force at the beginning of next year. The Alcohol Act has been under preparation for a long time and although the parties in Government set their policies back in May, the Act has still not been presented to Parliament.

“People in the industry are wondering what's delaying the Act and why it isn't moving forward. In May, we were led to understand that the Act would come into force at the beginning of next year, but now we're completely in the dark and have no idea when the Act will come into force or exactly what it will contain. This is an untenable situation for businesses, as they have to begin planning next year's operations without any information about the forthcoming legislation. The industry needs information about the Act's content and timetable. There is no good reason to mess a single industry about like this,” says Ussa.

The brewing industry agrees with the policies drawn up for the Alcohol Act in the spring. They create opportunities for domestic growth in the industry and bring Finnish drinking culture another small step closer to European drinking culture.

The brewing industry's greatest challenge is travellers' private imports from Estonia and ferries. The new Act would bring some rationality to the current situation. According to Pellervo Economic Research, the sale of strong (Class IV) beer in stores would reduce travellers' private imports. More beverages would be purchased in Finland, and likewise more taxes would be paid in the country where the detrimental effects are handled.

“Finland's high alcohol tax is the primary reason for the considerable volume of private imports made by travellers. However, increasing competition can also affect the price level and reduce consumers' need to buy beverages from abroad. The next step is to reduce taxes to a European level,” says Ussa.

Although travellers' private imports of alcoholic beverages have fallen slightly, private imports of beer, cider and long drinks have remained at a record high since 2013. The Federation of the Brewing and Soft Drinks Industry has demanded action from the Government to curb travellers' private imports.

“It's a question of business opportunities and safeguarding the future of Finnish jobs, and thereby also the tax revenue and other wellbeing they generate for society,” says Ussa.

Currently, the Finnish brewing industry directly employs over 1,700 people. About a thousand jobs have been lost in the industry over the last ten years. The industry provides direct and indirect employment for about 26,000 people and generates over EUR 2 billion in tax revenue for the State every year.

DOMESTIC SALES, 1 JANUARY–30 JUNE 2016

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

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