Brewers are bracing themselves for the second rise in duty on beer this year, in a move that will make beer in Slovakia more heavily taxed than in the Czech Republic and Germany, countries that have similar beer cultures.

Brewers warn that the tax hikes, to be implemented from July, will mainly hit young people, pensioners, and poorer members of society, who make up the majority of Slovakia's many beer drinkers.

Beer producers say that the rise, which is equivalent to an extra Sk1 (0.024) on each half-litre of beer, could further bring down beer consumption, already dropping after an increase in excise tax in January 2003.

The latest measure, which will increase duties on beer from Sk300 (7.28) to Sk500 (12.13) per hectolitre, was the result of a government compromise, after Finance Minister Ivan Mikloa initially proposed raising beer tax to Sk1,000 (24.27) per hectolitre, 10 times more than it was last year.

While the main reason for the changes, according to the Finance Ministry, is to plug a hole in the current budget, brewers suggest that it is also part of a general attempt to harmonize European Union taxes on alcohol to limit smuggling between member countries.

03 June, 2003