Malta: Increase in excise duty on beer to put local brewers at serious disadvantage

The Sense Group, the lobby group of Malta’s producers and importers of alcohol, has described the increase in excise duty on beer and spirits as “purely a revenue measure”, The Malta Independent communicated last week.

In his budget speech on October, 25, Finance Minister Tonio Fenech said: “To be able to further sustain the health sector, the excise duty on tobacco will increase by three and four per cent, while the tax on local beer will increase by slightly less than one euro cent on a 25cl bottle, and 13 per cent on spirits. All revenue from this measure will be directed to the health bill.”

Even though a €0.01 increase in excise duty on beer may seem to be minimal, this actually amounts to a 100 per cent increase.

When asked, the Finance Ministry said the increase in excise duty on beer also applies to 33cl and 50cl cans/bottles and draught beer, in addition to 25cl bottles. The duty applies to both local and foreign beer.

According to EU provisions, small breweries (such as Malta’s) producing up to 200,000 hectolitres pay half the normal rate of excise duty.

The €0.01 increase on 25cl bottles is simply an example and is calculated according to measurements used for small breweries.

The Sense Group said it does not make sense that the government has opted to reverse this decision just one year after it was implemented, re-opening the doors to illegal importation of alcohol.

“This will put local producers and importers at a serious disadvantage and will threaten their financial performance, as well as jobs in this sector,” the Sense Group said.

03 November, 2010