Estonia: Craft brewers not planning to raise prices following excise hike

Estonia’s small breweries, with a market share of about one percent, are not planning to raise their prices following the entering into force of higher excise duties on beer.

While the large producers such as Saku and A. Le Coq are complaining about the excise hike and have noticeably raised the price of their products, plenty of smaller breweries are profiting from the situation, writes daily Postimees.

A great advantage is the fact that breweries that produce less than 600,000 litres of beer a year pay only half of the excise rate. This alone will allow them to keep their current prices, or raise them only marginally.

“We’re trying to compensate for the higher excise rate by producing more efficiently, and at the expense of the business’ profits. Here the production volume matters, which reduces the price per unit once it goes past a certain point,” Jaanis Tammela of the Tanker brewery told the paper.

Põhjala’s Enn Parel said the same, confirming that small producers can swallow the excise hike and make up for it by adjusting production.

CEO of A. Le Coq, Tarmo Noop, commented that the small producers actually had room to lower prices, seeing as the excise duties they paid were so much lower.

10 July, 2017