E-Malt.com News article: 2405

Poland will hold its current excise tax on beer at the maximum level permitted by law, despite calls to lower it from brewers fearing that customers will start buying cheaper beer in neighboring countries after Poland joins the European Union in May, Interfax-Europe posted on March 24. "We have a current rate set and we are not about to change it on May 1," Finance Minister advisor Jaroslaw Neneman told reporters.

Currently, the excise tax on beer is set at an estimated PLN 0.43 per bottle, versus roughly PLN 0.18 in Germany, PLN 0.19 in Czech or PLN 0.20 in Slovakia. When the country joins the EU, Poles will be able to bring more than 100 liters of beer across the border per day without paying a Polish tax on it. The government had originally said it wouldn't implement the maximum excise tax.

The ministry dismisses claims that the high excise tax will substantially stymie Polish brewers' ability to compete on an international market, responding instead that the levied excise and VAT taxes together constitute a mere 36% of the end price of a half-liter of beer. The ministry plans to monitor the beer market after EU accession on May 1 and said is prepared to lower the tax, if the market slumps "significantly."

"A 10% market fall would be significant, but this does not mean we will automatically act then," Neneman said. The Finance Ministry is counting on PLN 2.2 bln of revenue in 2004 from the excise tax on beer, similar to 2003. The excise tax on beer has been at current levels since 2001. Polish brewers claim they may lose as much as 20% to 30% of the beer market as Poland enters the European Union with excise taxes on beer at more than twice the rate paid by their neighboring German and Czech competition.

Poland's three largest brewers rejoin that a business environment hostile to profits is uninviting to their further investment. Their foreign masters - Dutch Heineken, Danish Carlsberg and SABMiller, the world's second-biggest brewer - say they could shift their investment plans to countries with more favorable tax regulations. Heineken's Zywiec group, which battles SABMiller's Kompania Piwowarska (KP) for Poland's top brewer spot, saw full-year sales growth of over 5% while KP observed 7.2% growth, thanks to the acquisition of mid-sized brewery Dojlidy. Carlsberg Okocim, Poland's number-three brewer, witnessed 6.6% growth.


26 March, 2004