Illustrative image. (source: SME - Marko Erd)
As part of its fiscal consolidation efforts, the Slovak government introduced a tax on sugary drinks and syrups earlier this year. The move has led to a steep rise in prices—by 30 to 50 percent for soft drinks, and in some cases, syrup and juice concentrate prices have doubled compared to the previous year.
The Finance Ministry, led by Ladislav Kamenický (Smer), had forecast that the tax would generate approximately €70 million in revenue this year, rising to over €90 million annually in the following two years. The ministry anticipated a modest five percent decline in sugary drink sales due to the price hike and incorporated this into its projections.
However, the Slovak Soft Drinks and Mineral Waters Association (AVNM)—whose members include Coca-Cola, Kofola, Mattoni and Red Bull—has cast doubt on those assumptions, Index magazine reports.
Chance of a rebound
"We are seeing a decline in the soft drinks market of between 15 and 25 percent, meaning the state will ultimately collect less in tax," said AVNM director Lucia Morvai.
She added that the downturn would likely have been more severe had supermarkets not sold off existing stock earlier this year purchased in 2024 at pre-tax prices.
Although there is a chance consumers will eventually adjust to the higher prices, stabilising sales in the medium term, early indicators are concerning. If the current trend continues into the first quarter of 2025, tax revenue could fall to between €54 and €61 million—well below the planned €69 million.
Low-income families affected
The Finance Ministry has not yet disclosed how much revenue has been collected from the tax to date.
Despite the sales slump, Pavol Majher, head of the Budget Analysis and Forecasting Department at the Council for Budget Responsibility, maintains that the tax is still performing in line with expectations.
Sales data show that the most significant declines have been in lower-cost 1.5-litre and 2-litre sugary beverages, suggesting that price-sensitive consumers are being disproportionately affected. Low-income households appear to bear the brunt of the new levy.
The AVNM also noted a "significant" fall in syrup sales, while Coca-Cola and Kofola products have seen a 15 percent drop.
