Small breweries warn over hike

A PLANNED rise in the excise tax on beer as of next March might have a destructive effect on small independent breweries, some of which could be forced to end their operations. So says the Association of Small Independent Breweries, which warned about this possibility in early September.

Higher excise taxes will make beer more expensive.Higher excise taxes will make beer more expensive. (Source: SITA)

A PLANNED rise in the excise tax on beer as of next March might have a destructive effect on small independent breweries, some of which could be forced to end their operations. So says the Association of Small Independent Breweries, which warned about this possibility in early September.

“Small breweries in Slovakia are something of an endangered species,“ said association chairman Ľubomír Vanč from the Banskobystrický Pivovar brewery, as quoted by the SITA newswire.



“If we do not join forces to protect them, it might happen that Slovak customers will definitively lose the traditional taste of beer brewed in a classic manner without cure accelerators, and lose the current variety of tastes."

Representatives of small breweries are against what they call a radical increase in excise tax on beer and are demanding a new categorisation for small independent breweries.

A lower tax rate is currently in effect for breweries with an annual output of up to 200,000 hectolitres. The association would like to introduce new categories for excise tax, under which producers of up to 200,000 hectolitres annually would pay a 30-percent lower excise tax while a 50-percent discount would be introduced for breweries making up to 100,000 hectolitres, a 70-percent discount for producers of up to 50,000 hectolitres and a 90-percent reduction for micro-breweries with an annual output less than 2,000 hectolitres, meaning they would be almost exempt from tax.

Large brewers are also protesting against the excise tax hike on beer. On September 22 they delivered an open letter to the cabinet issuing a warning about the tax hike.

"We demand that the government not discriminate against beer," Štefan Karšay (right in the photo), the president of the Slovak Association of Producers of Beer and Malt, told the media, as cited by the Sme daily.

Beer producers perceive it as discriminatory that the excise tax on beer has been increased by 221 percent over the last 10 years while the excise tax on wine has not changed at all.

The Slovak government is increasing the excise tax on beer as part of its efforts to improve public finances. The excise tax rate is proposed to increase from €1.65 to €2.45 per hectolitre next March. The same increase of 49 percent would apply to small brewers, where the rate is set to rise from €1.22 to €1.82 per hectolitre, according to the Finance Ministry proposal.

The Finance Ministry has challenged the association’s arguments. Martin Jaroš, spokesman for the Finance Ministry, told SITA that the excise tax on beer has not been increased since 2003, unlike the excise tax on spirits, which has increased twice since 2003, most recently in April this year. Even after the planned increase in the excise tax on beer, he said the alcohol content in beer will still be taxed at half the rate of spirit alcohols.


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